Corporate Venturing and Investing
Corporate venturing and investing had taken a back seat after the dot com bubble burst in 2000. But now the major players are back again and corporate venturing & investing is resurfacing as a strategy based business.
Everything from telecommunications to biotechnology is finding a new lease of life from investors. According to the national venture quota association, corporate venture investment has risen from $ 680 million to $ 1.05 billion in the last one year.
These strong earnings have allowed companies the leeway to invest in unproven technologies as well. But even now, you can clearly see an apprehension among the major technological giants regarding corporate venturing & investing.
One of the most important reasons for this is that the interests of the venture capitalist and the corporation seldom meet.
Most companies invest in start ups to keep an eye on new upcoming technologies, to look for new acquisitions and also to block newer products that might prove to be serious competition.
However, major companies like Sun and Dell have disbanded their venture group. Other technology giants are trying to look at
Corporate Venturing and Investing from a strategic point of view while ensuring that they avoid the pitfalls of financial commitment. This in itself is the biggest challenge that venture groups are facing today. They need to strike the right balance between the strategy and the financial roles.
The triumph and rise of new technologies needs it to be backed up by venture capitalists. Intel, which is considered to be one of the most tech savvy investors, recently invested $ 600 million in a new WiMax company led by Craig O. McCaw.
Yahoo too has reportedly made a huge profit by investing in a startup venture called Google, about 10 years ago. This example itself proves that venture investing is not all about losing money.