#Touchdown ventures focus professional#

This key difference in structure results in a massive concentration of power for most parent corporations sponsoring CVC programs, with meaningful implications for how CVCs operate. Unlike Sequoia, which has many limited partners, Merck is the only investor in Merck’s Global Health Innovation Fund, and so on. In contrast, most CVCs have only one source of investible capital: the CVC’s parent corporation. These institutional funds should be viewed distinctly from “micro VCs” or angel funds, which may be investing the capital of a few wealthy individuals and have neither institutional investors nor a diversified LP base. While there may be a “lead investor” for a VC fund, in most cases, it takes multiple LPs to make changes during the term of a fund. It’s not uncommon for a venture capital fund to include somewhere between 10 and 100 limited partners, which limits the concentration of power for any single LP. This is similar to the way that venture capitalists themselves syndicate start-up investments.

#Touchdown ventures focus professional#

Many professional LPs set policies to compose 20% or less of the total capital commitment for any given fund. In most institutional venture firms, there is a diversified base of LPs. These sources of capital are known as limited partners (LPs), while the managers running the VC fund are known as the general partners (GPs). Traditional VCs are known as “institutional” because their investible capital is derived primarily from institutions like public pension funds, university endowments, money management firms that specialize in fund investing and professional family offices. Seven typical differences between CVCs and VCs Each type of organization also has various stakeholders demanding coordination and communication.īeyond the above commonalities, these two types of investors can also be very different. In these two variants of venture capital, the fundamental activities and processes are largely the same: (1) source opportunities, (2) perform diligence to evaluate their attractiveness, (3) negotiate and execute transactions, (4) manage the resulting portfolio of investments and (5) guide them through the process of achieving liquidity. And, for the majority of investments, both seek a financial return when the start-up is ultimately sold or completes a public stock offering. Both attempt to provide various forms of operational support to help these companies grow.

Both make minority investments of cash in exchange for equity ownership in private companies. These two types of investors have a lot in common. “Traditional” venture capitalists are called institutional investors, financial VCs or simply VCs, while corporate investors are best known as CVCs. But to get the most out of corporate venture capital (CVC) investment, CEOs and their teams need to understand the leading practices of venture capital, as well as how corporates can leverage their strengths to access relevant deals. We partnered on this article to provide our views of seven typical differences between VCs and CVCs.Ĭompany executives looking to add new capabilities or enter new markets can consider corporate venturing as an option to jump-start innovation. Touchdown Ventures has been recognized by Global Corporate Venturing for launching the most CVCs. EY-Parthenon team and Touchdown Ventures have collaborated to assist companies in establishing and managing corporate venture capital programs.