Corporate Venture Funds

Corporate venture funds operate in a similar manner to venture capital funds. The key difference between the two is that a corporate venture fund is backed by a corporate entity, such as a financial institution or insurance company that focuses on investing in promising startups relevant to the industry they operate in.

Corporate venture funds allow corporate entities to experiment in the innovation space, testing new technologies, or identifying and integrating disruptive technology in a forward-leaning stance. While corporate funds may focus on fostering development in the industry they operate in, they’re still concerned with capturing a return on investment, and thus support only highly promising startups. By launching separate venture fund arms, slow-moving corporate organizations are able to keep up with the rapid innovation of the startup ecosystem.