The Pros and Cons of Corporate VCs

There are both advantages and disadvantages for financial VCs considering a co-investment by a corporate venture investor. The pros include, the ability to draw on the extensive due diligence resources of the corporate parent company; benefiting from the corporate VC's skills at evaluating later stage risk; and the corporate VC's perspective of the customer. On the downside, the unpredictability of corporate VCs' ability to make follow-on investments; different expectations on returns; and potential conflicts-of-interest. In general, though corporate VC investment is a very good thing, and any associated negatives can be handled through the structuring of the relationship and by making sure that there are consistent expectations on both sides.