Corporate venture capital (CVC) refers to the practice of companies investing in and partnering with startup companies, typically in the form of equity investments. Corporate venture capital can take many forms, from a company investing a small amount of money in a startup to a large company creating a dedicated venture capital arm that operates like a standalone venture capital firm.
CVCs are typically established by large, established companies looking to invest in and gain exposure to new and innovative technologies, products, and business models that could potentially help their core business. By investing in startups, CVCs can gain access to new technologies, talent and expertise, and potentially open new revenue streams.
CVCs typically have a specific focus or strategic objective, such as investing in startups that are developing technologies or products that align with the parent company's core business. They also often provide resources, such as access to customers, distribution channels, and expertise, to the startups in which they invest.
CVCs can also be a way for startups to gain access to the resources and expertise of a large company, as well as potential customers and distribution channels. CVC can also be a way for startups to access capital at favorable terms and conditions as compared to traditional venture capital firms.