Why Raising Corporate Venture Capital Benefits Startups
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Fundraising is both a science and an art. The method that a startup uses to raise money helps determine its financial situation and how much help and advice the startup receives along the way.
Startups may initially use personal or family funds to start the business, but crowdfunding has also grown in popularity. Still, venture capital funding is the dominant source and is at an all-time high in recent years; CB insights reports that U.S.-based venture capital investments totaled $130 billion in 2020.
CVCs typically invest with a strategic goal in mind. They want to tap into innovation across industries related to their current business and roadmap in addition to achieving a positive financial return. Furthermore, CVCs aim to build new revenue streams through strategic collaborations with portfolio companies.
Looking at it from the startup’s perspective, the company gets not only funding, but they benefit from the advice and infrastructure of a corporation. This may help the startup learn how to expand their business, enter international markets, qualify for new products and manufacture at scale.
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