Navigating the Future of Corporate Venturing: Strategic Insights for Boardroom Leaders
Yesterday evening, London Business School hosted an event to discuss the future of corporate venturing. Hosted by the school’s Professor Gary Dushinitsky, Global Corporate Venturing James Mawson and REV Venture Partners Founder Tony Askew, the event gave an overview of where corporate venturing is, the challenges that corporate venture capital companies face and advice for CVCs to navigate the growing ecosystem so that they can support innovation and deliver growth.
Corporate venturing has rapidly evolved from a niche innovation tactic into a critical strategy for companies seeking to stay competitive in today’s dynamic business environment.
The discussions were illuminating, but one message stood out: the success of corporate venturing hinges on strategic alignment, long-term vision, and effective communication.
For senior leaders, understanding these pillars is key to unlocking the full potential of CVCs.
Strategic Alignment: Laying the Foundation for Success
A thriving CVC initiative must align with the parent company’s overarching strategic objectives. This goes beyond merely investing in promising start-ups — it demands a deliberate approach to ensuring that the CVC complements and advances the parent organisation’s broader goals.
However, it’s worth noting that the relationship between some corporates and their CVCs is often different and complex. This is down to the corporate culture and the understanding, or lack of, that exists within a corporate entity.
Key Actions for Leaders:
Culture and the lack of understanding of the value that corporate venturing can unlock is everything. And to unlock value and financial return, what is needed is for corporates and CVCs to:
Define Objectives Early: Are CVCs pursuing financial returns, strategic innovation, or both? Establishing clear goals from the outset ensures that CVC investments are targeted and relevant to the business’s needs.
Foster Cultural Synergy: Corporate culture can make or break a CVC initiative. Companies with risk-averse or hierarchical corporate cultures may stifle the entrepreneurial energy essential for CVC's success. Leaders must cultivate an environment that supports agility and innovation. Equally, within the CVCs, there is a need to be able to effectively communicate strategically with not just the market and potential start-ups but also their corporate ‘mothership.’
Integrate Strategically: Investments should not operate in isolation. Build pathways to integrate innovations into the core business, enabling scalability and impact across the organisation. Effective strategic positioning and engagement with senior management is critical. Fundraising and deals can be lost without the knowledge of C-Suite and Board members, their views and past experiences, even how they have been conditioned in their journey in business. Insight is everything.
Balancing Financial and Strategic Objectives
While financial returns are a key measure of success, they often take years to materialise. Focusing solely on short-term profits risks overlooking the broader strategic value of CVCs, such as early access to emerging technologies and entry into new markets.
After the event, in a conversation with Professor Dushintsky, I raised the critical point of the disconnect between the timeline to realise the potential of an investment in a promising start-up and the expectation to return cash. Corporately, at least in the US, everything in measured in quarterly data. Yet, the return is not realised for many years for some investments.
REV Venture Partners Tony Askew made the critical point that for a CVC the trickiest and most challenging period for a CVC is the first 6 months.
Corporates are very political, and navigating this environment can be challenging. It is during the first two years of a CVC that they need to be able to create trust and a positive reputation internally. Often overlooked is how they establish their corporate credentials with the people that they don’t meet. Their strategic task is to ensure that the CVC team is good at making investments.
Board-Level Guidance:
Adopt a Portfolio Approach: Diversify investments across growth stages to balance risk, reward, and exposure to breakthrough innovations. What we are seeing now is some corporates that have multiple CVCs, each with different investment remits and appetite for risk. An approach that is only established when the Board and/or executive understand the value of venturing.
Measure Beyond Money: Develop KPIs that reflect strategic outcomes, such as market insights, adoption of innovations, and strengthened competitive positioning. Those KPIs are invaluable at telling a story to a CVC's varied audiences, hence why it is important to know how to present the work that is being done and the value in terms of cash return, IP ownership, etc.
Be Patient: Financial returns take time. Adopting a long-term perspective enables companies to realise both financial and strategic benefits fully. Equally, CVCs need to ensure that in their communications with the corporate entity and other investors and stakeholders, the positioning gives them the necessary insight and narrative with which they can themselves navigate their own situations.
Cultural Considerations: Navigating Internal and External Challenges
Cultural dynamics — both within the organisation and across regions — play a critical role in CVC's success. For example, US-based CVCs often see faster returns due to a mature venture ecosystem, while European and Asian counterparts face longer timelines due to regulatory and cultural complexities.
Leadership Priorities:
Leaders need to think strategically and:
Bridge Organisational Gaps: Establish cross-functional teams that facilitate collaboration between the CVC and the parent business, reducing friction and fostering knowledge exchange.
Empower Autonomy: Allow the CVC team to operate independently within the fast-paced start-up ecosystem while maintaining clear and consistent communication with the parent company.
Strategic Communication: The Hidden Catalyst for Success
Speaking to other attendees after the event, the subject of effective communication being a cornerstone of successful CVCs came through.
Building trust and credibility with stakeholders — start-ups, corporate leadership, or external investors — is essential. Without it, even well-funded CVCs can struggle to gain momentum.
Recommendations for Leaders:
Corporate venture capital teams must invest in how they and the start-ups they invest in present themselves. Perception and understanding can both mitigate risk and position a CVC to gather better investment opportunities.
Build the CVC’s Reputation: A strong reputation attracts top-tier start-ups and enhances the portfolio’s quality and impact.
Engage Stakeholders Transparently: Regular updates and open communication build trust and alignment across both internal and external stakeholders.
Establish Thought Leadership: Position the CVC as an innovation leader by publishing high-quality content, participating in key industry forums, and collaborating within innovation networks.
Reaping Dual Rewards: Financial and Strategic Value
The conversations at the London Business School event underscored a powerful truth: the value of CVCs extends far beyond financial returns. Companies with robust CVC strategies can achieve:
Innovation at Scale: Gain early access to transformative technologies and business models.
Enhanced Market Positioning: Establish a competitive edge in emerging sectors and accelerate market entry.
Stronger Reputation: Position your organisation as a forward-thinking, innovative leader.
Next Steps for Leaders:
Invest in Capability Building: Provide your CVC team with the resources, skills, and autonomy needed for success.
Commit to Long-Term Support: CVCs need to be treated as a strategic partner rather than a financial asset, adapting their focus as markets evolve.
Leverage Communications Strategically: Amplify the CVC’s achievements internally and across the market where it needs to operate, align stakeholders, and build its credibility across the venture ecosystem.
A Blueprint for CVC Excellence
Corporate venturing represents a transformative opportunity for companies to innovate, grow, and thrive in an increasingly competitive landscape. However, achieving success demands more than funding — it requires strategic alignment, cultural integration, and effective strategic communications.
The imperative for boards and C-suite leaders is clear: think long-term, empower your CVC teams, and communicate effectively. Leave them to do what they are great at doing, regardless of the external expectations that affect the corporate. By embracing these principles, businesses can unlock the full potential of corporate venturing — delivering both financial performance and strategic growth for the future.
