With innovation becoming increasingly important in a world of global competition, many large companies are to realizing that they cannot invent everything, and that the best way to develop new products and strategies is to invest in smaller, external companies that are at the cutting edge of developments in any given sector. Corporate Venture Capital (CVC) units are large corporations’ attempts to access these innovation networks.

The report contains:

• Analysis of responses to a survey of 39 CVC units, from around the world, as to what current practice is within CVC and how a unit should best pursue success.
• A roundtable discussion involving executives from some of the world’s leading CVC units on the challenges that face large companies when setting up venturing units, and the ways in which they attempt to access innovation through venturing.
• Examination of the current state of the CVC market, accompanied by statistics and discussion on the current major trends.

Key points:

• Securing business unit sponsorship for investments is the top CVC challenge.
• Mapping emerging innovations is the most important strategic objective.
• Identifying partnership/alliance opportunities is the most signifi cant area of portfolio company support.
• Deal activity, deal output and value added to business units are key nonfinancial success measures.
• Most CVC units report to the CFO or CTO/CIO, reflecting a focus on financial returns and innovation.
• Cleantech is a fast-growing area of CVC focus.

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Table of Contents
Ernst & Young corporate venture capital survey ............................5
A summary of the results of the Ernst & Young survey of corporate venturing programs globally
Corporate venture capital roundtable ..........................................13
A discussion among Andrew Jay of Siemens Venture Capital, Mary Kay James of DuPont Ventures and Steve Tregay of Novartis Venture Funds on the leading topics in corporate venturing today
Corporate venture capital — a global snapshot .............................22
A roundup of global corporate venture capital investment statistics with a focus on the United States, Europe, Israel and China

Foreword
With increased globalization, innovation has become the new currency of competition. More and more large corporations have realized that relying just on in-house research and development (R&D) is not sufficient to compete effectively in today’s global markets.

A robust innovation strategy includes both internal initiatives and mechanisms to access external innovation, including collaborations, partnerships, acquisitions, joint ventures, licensing and investments in emerging venture-backed companies. Corporate venture capital (CVC) is a vital component in the innovation strategies of corporations around the globe.

By definition, corporate venture capital is investment money that is in some way connected to another corporate entity whose core business is something other than providing equity fi nance. The nature of this kind of investment creates challenges in a number of important areas, such as alignment with the parent company, governance, compensation and metrics for success. ...

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