Organizational Structure and Decision-Making in Corporate Venture Capital

Ilya A. Strebulaev and Amanda Wang
Additional contact information
Ilya A. Strebulaev: Stanford U
Amanda Wang: Stanford U

Research Papers from Stanford University, Graduate School of Business

Abstract: This paper studies corporate venture capital (CVC) units of large US corporations to learn how they make decisions across several areas: internal organization of CVC units, relationships with par- ent companies, CVC unit objectives, investment process and approval, deal structure, relationship with portfolio companies, compensation, and composition of CVC teams. The study is conducted by interviewing senior team members of seventy-four CVC units, representing 78% of the active CVC units of companies in the S&P 500 index. CVC units are organized in significantly more diverse ways than institutional VC firms. Unlike institutional VC firms, most CVC units do not manage committed venture funds, but instead invest from the balance sheets of their parent compa- nies. Investment committees, in which parent company executives play a pivotal role in approving individual decisions, are common. Many corporate venture capitalists (CVCs) believe executives at their parent companies do not understand the norms of the venture space. The demographic composition of senior team members at CVC units is very different than that of their counterparts at institutional VC firms. The results raise a number of issues about the economic role of CVC units in corporate innovation.

Date: 2021-11
New Economics Papers: this item is included in nep-cfn and nep-cwa
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.gsb.stanford.edu/faculty-research/work ... rate-venture-capital

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:4008

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().