TY - JOUR
T1 - Creating Value Through Corporate Venture Capital Programs: The Choice between Internal and External Fund Structures
AU - Asel, Paul
AU - Velamuri, S. Ramakrishna
AU - Park, Haemin
PY - 2015
Y1 - 2015
N2 - We explore the appropriateness of structuring CVC units internally (the corporation makes investments off its own balance sheet) versus externally (the corporation, acting as a limited partner, endows a separate legal entity managed by general partners with capital to invest on its behalf). We study the implications of this structural choice on i) scope of investments, ii) balance between strategic and financial objectives, iii) performance measurement, iv) deal sourcing and due diligence, v) post-investment involvement of the corporation, vi) HR issues, and vii) exit considerations. We conclude with recommendations for corporations on when to employ internal versus external CVC structures.
AB - We explore the appropriateness of structuring CVC units internally (the corporation makes investments off its own balance sheet) versus externally (the corporation, acting as a limited partner, endows a separate legal entity managed by general partners with capital to invest on its behalf). We study the implications of this structural choice on i) scope of investments, ii) balance between strategic and financial objectives, iii) performance measurement, iv) deal sourcing and due diligence, v) post-investment involvement of the corporation, vi) HR issues, and vii) exit considerations. We conclude with recommendations for corporations on when to employ internal versus external CVC structures.
KW - Corporate Venture Capital
KW - Innovation
KW - Strategic Investing
KW - Corporate Venture Capital
KW - Innovation
KW - Strategic Investing
U2 - 10.3905/jpe.2015.19.1.063
DO - 10.3905/jpe.2015.19.1.063
M3 - Journal
SN - 1096-5572
VL - 19
SP - 63
EP - 72
JO - Journal of Private Equity
JF - Journal of Private Equity
IS - 1
ER -