Corporate venture capital under the new business paradigm

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Corporate Venture Capital, involving the acquisition of non-public equity in independently managed startups or growth companies by corporations, is increasingly significant. This work explores Corporate Venture Capital within a broader strategic framework, offering a working definition and typology due to the topic's novelty. It outlines the historical context, recent trends, and driving forces behind this evolution from a secondary role, overshadowed by traditional Venture Capital, to a strategically aligned corporate activity. Key elements of the new corporate landscape, such as information and network economics, are examined to illustrate the alignment between Corporate Venture Capital's strategic potential and corporate challenges. The development of essential capabilities for adapting to a rapidly changing environment is emphasized. The work argues that effectively communicating the strategic potential and risk minimization aspects of Corporate Venture Capital may alleviate shareholder concerns and capital market hesitations. A review of existing literature reveals that strategic fit and structural governance are crucial, challenging claims that mere replication of Venture Capital methods guarantees success. Drawing on contemporary organizational theory and corporate governance research, it discusses the hybrid organizational form of Corporate Venture Capital and proposes structural recommendations for the corporation-in