While traditional venture capital firms are the go-to option for most startups, there's another avenue that's been gaining attention in recent years: Corperate Venture Capital (CVC). Let’s talk about what exactly CVC is and how these investments differ from traditional venture capital.

🤔 What is Corporate VC?

Corperate VC firms usually sit within the structure of a large, established company. Most CVC firms draw money from their parent company for their operating budget. These investors often act as an avenue for large companies to maintain their core lines of business while remaining open to innovation and new opportunities. Some well known CVC firms, and the parent companies they operate under, include:

• Salesforce Ventures (Salesforce)

• M12 (Microsoft)

• Sony Innovation Fund (Sony Music)

🥅 What are their primary objectives?

CVC firms are looking for investment opportunities that will ultimately help their parent organization improve its bottom line. This is a major distinction between traditional VC and CVC; traditional VC firms are looking to maximize returns for their LPs while CVC firms are looking to maximize returns for their parent company.

As a result, CVC investors can often make a very powerful ally for early-stage startups, especially if said startup is building on top of the parent company’s product and services. A great example of this is Klaviyo, an email marketing app for Shopify, that received an investment from Shopify Ventures for one of their recent fundraising rounds.

✅ Is Corporate VC Right for you?

It depends; some early-stage startups can benefit greatly from working with CVCs. They can often provide a powerful boost in the form of partnerships, marketing, and customer relationships. However it’s important to keep in mind that their ultimate goal is to serve the needs of the parent company, so it’s important to make sure your long-term visions are aligned.

However, for the right kind of company, working with CVCs can provide a powerful edge over the competition. It is definitely a source of capital early-stage startups should consider in the right circumstances.

Read the full source article →

Founder Resources, News & Events

🔗 Links to Share & Save

• a16z Blog: Pricing and Packaging Your B2B or Prosumer Generative AI Feature

  
  

• Forum Ventures: Pacific Northwest Founders: apply for a pre-seed accelerator and receive a $100k investment + mentorship

  
  

• Peter Walker (Carta): Fundraising cheatsheet for early-stage founders in 2024

✨ Featured Investor of the Week

Each week we highlight an early-stage investor that is actively writing checks to Pre-Series A companies. If you’d like to request a warm introduction, reply to this email or click the “Request Intro” button!

Note: We use a double opt-in system to ensure warm introductions; you will only receive a reply if an investor has accepted your request.

Pratik Budhdev

Senior Investment Director, Volvo Cars Tech Fund

📍Location:

San Francisco, CA

📈 Stage:

Series A, Series B+

💵 Check Size:

$1M - $5M

Pratik leads the global investment strategy and execution for the company's corporate venture capital arm, Volvo Cars Tech Fund. He has over 15 years of experience in private equity, M&A, and corporate finance, with a focus on mobility, insurtech, and fintech sectors.

He’s passionate about investing in visionary entrepreneurs and startups that are transforming the future of transportation, safety, sustainability, and customer experience.

He serves as a board member or observer for several portfolio companies, and as a mentor for various accelerator programs. He’s also a Sloan Fellow from Stanford University’s Graduate School of Business, a Chartered Accountant from India, and a Forbes Finance Council member.

Pratik’s Fun Fact: I am a ex-TV star from India. I worked on a few ads and then retired.