How to get the most from your corporate VC after you get the check

How to get the most from your corporate VC after you get the check

Scott Orn

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Scott runs operations at Kruze Consulting, a fast-growing startup CFO consulting agency. Kruze is predicated in San Francisco with purchasers within the Bay Area, Los Angeles and New York.

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Bill Growney

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Bill Growney, a associate in Goodwin’s Technology & Life Sciences group, focuses his follow on advising know-how and different startup corporations by means of their full company life-cycle.

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Raising capital from a company VC can deliver many advantages past simply cash. Strategic CVCs, who measure ROI based mostly on the power of the strategic partnership with their portfolio corporations in addition to the monetary return, will usually search to maximise their relationships with startups for a very long time after the funding is made.

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Specifically, a CVC investor can provide the next to an entrepreneur:

  1. Resources and product suggestions. CVC guardian corporations typically have deep institutional experience and groups of subject-matter consultants who can advise startups on product improvement and information them by means of points.
  2. Partnerships. CVCs can leverage their provide chain and operations to construct new partnerships that in any other case could have taken months or years for startups to create.

  3. Distribution. Strategic CVCs can change into a distribution channel for a startup, join that startup with their suppliers, and even use the startup to change into a channel for the guardian firm.

  4. Branding halo. If a big firm is prepared to spend money on your startup, it’s a robust sign that your product is sweet and that your online business has a vivid future.

  5. Acquisition. Many CVCs spend money on startups that they could wish to purchase down the road. A CVC may additionally endorse an exit-seeking portfolio firm to their associate corporations or suppliers.

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Granted, seeing outcomes from these advantages takes time, and even the very best of intentions throughout a capital increase course of could not at all times yield an optimum strategic relationship.

Here’s a listing of things to bear in mind for founders who need the very best probabilities of a productive and profitable relationship with their CVC.

Know which kind of CVC you’re coping with from the outset. In our earlier posts, we outlined the three sorts of CVCs — skilled institutional traders, industry-specific strategics, and newbie or “vacationer” CVCs. As we’ve mentioned, make sure you spend time interviewing and constructing relationships with CVCs to find out which kind they’re, what varieties of advantages and assets they’ll provide and what their historical past seems to be like by way of efficiently partnering with startups over time. When doubtful, ask different founders who’ve carried out offers with them!


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