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.
Question: How do institutional venture capitalists regard the
proposed investment by a corporate venture fund in a later (Series
B or after) financing round of a biotech or medical device
company?
Answer: Corporate venture funds have different missions and thus employ different investment practices. That makes it difficult to generalize institutional venture funds' reaction to the introduction of a corporate player...
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