Definition of corporate venture capital
This is a special form of venture capital in which non-financial firms invest in target companies such as startups or buyouts. These investments often follow not only purely financial interests, but also pursue strategic goals in developing new or complementary technologies or business fields to those in which the firm is already active.
This objective is often described as "window on technology" to have early and better access to innovations. The goals of the target companies comprise the access to additional financing as well as a strengthening of research and development or marketing and distribution channels.
The "window on technology" approach may for example comprise the closer observation of technological developments and innovation, often with a lean and entrepreneurial organisational structure that might not be maintained in larger companies. This approach could, for example, result in technology transfer from the target firm to the acquiring firm or to a better combination of resources in the acquiring and the target firm.