Corporate Venture Capital Checklist

Corporate Venture Capital helps businesses get funding from large corporates, in return for shares in the business. As well as finance, a business may gain access to the network, expertise and contacts of the corporate group.

The journey to securing Corporate Venture Capital can be about proving how your business can help the corporate through market insight, market reach or innovative technology. This checklist can help you identify the benefits and common pitfalls of Corporate Venture Capital – as well as understanding whether the process could be  achievable for your business – before you start.

Stage 1: Getting Prepared

Do you understand what finance your business needs?

What finance options are available?  What should you be asking for? How much investment do you need? How much equity are you prepared to share?

Do you understand why Corporate Venture Capital may be right for you?

Do you know how the process works? Are you comfortable having a Corporate Venture Capital firm investing in your business? Do you understand that you may have to part with significant control, Intellectual Property (IP) and business ‘secrets’?

Are you aware of the differences between Corporate Venture Capital and Venture Capital (VC)?

Have you explored options with Venture Capital investors? Do you have a clear understanding of the benefits and downsides of targeting Corporate Venture Capital compared with Venture Capital?

Have you done your research?

Have you researched firms who have worked with similar businesses to yours? Have you spoken to other businesses who’ve been through the process? 

Have you been networking?

Even though Corporate Venture Capital will most likely be experts in your market – and therefore may already be aware of who you are – it maystill be a good idea to get out there and try to sell your company. Talk to investors at networking events and accelerators to better understand the landscape. 

Do you have a relationship with existing investors that you can capitalise upon? 

Sometimes current investors – like angels – can facilitate an introduction to Corporate Venture Capitalists.

Stage 2: Choosing a Corporate Venture Capital

Have you done in-depth research on the firm? 

Do your due diligence on the Corporate Venture Capital firm – they might have a say in how your company is run. Who are they? What do they represent? Who have they invested in before? What’s their track record like?

What additional value would the Corporate Venture Capital firm add? 

Will they be able to give you the expertise or innovation that you’ve been missing? Do they have contacts or a distribution network that you wouldn’t be able to access otherwise? 

Are you clear about – and comfortable with – what you’ll be giving up?

Why specifically is the Corporate Venture Capital firm interested in you? Are you comfortable in exposing your IP to them? What rights are you giving up that may be a hindrance in the long-term?  

What type of relationship is the Corporate Venture Capital looking for?

Do they want to work as a close-knit unit or have a more stand-off relationship? 

Do your goals and expectations line up?

Are your outcomes aligned? Do you share the same vision for your company? Have you looked hard to identify any strings that may be attached?  

Do you believe you can work with the firm long term?

The lead investor from the Corporate Venture Capital firm may offer you help and support and may even sit on your board. Could you have an awkward conversation with them? Would you be comfortable spending a lot of time with them? Are they committed to you, or just the corporate they represent?

How will the deal affect your relationship with the wider market?

If you align yourself with a particular corporate in your sector, will you be causing conflict with other corporates, businesses or partners, that may negatively affect your business in the long-term? 

Stage 3: Preparing to pitch 

Do you have a pitch deck?

If an investor wants to meet, they’ll often expect a pitch deck. This should include, amongst other things, information on your team, strategy, competition and investment terms. 

Is your business plan in order?

Can you explain the opportunity your business has and how you plan to capitalise on it?

Do you have an exit strategy?

Do you have an idea about how long the relationship will last? Are you clear on each party’s end goal and how it may be achieved?

Can you prove everything you’re saying?

Investors usually expect business owners to really demonstrate their handle over the business. Do you have the evidence to back up your statements? Can you show how you’ve tested the market or validated demand? 

Stage 4: Thinking ahead to the deal

Are you prepared for complex negotiations?

There may be a crossover of interests between the Corporate Venture Capital and your business, you may need to enter into a lengthy negotiation period covering every small detail. It can often take a year or more to do a deal. 

Do you have some budget set aside?

You’ll need to have some money available to pay things like legal fees, accountants and valuers. There are also likely to be additional, unexpected costs if the investor requires additional details about your business, for example.  

Have you got an idea on timescales?

Speak to experts and have a clear plan of how you expect the deal to play out. Be realistic about timings, so you can prepare for each stage of the process.