This case allows students to see typical thinking and behaviors that a student entrepreneur might have. The case briefly describes the product and team of the entrepreneurial company and invites students to look for the values of the company from a venture capitalist’s angle. The case is most suitable for MBAs as it enables a professor to introduce the “chemistry” between early-stage venture capital institutions and their portfolio companies in one case/class.
We explore the appropriateness of structuring CVC units internally (the corporation makes investments off its own balance sheet) versus externally (the corporation, acting as a limited partner, endows a separate legal entity managed by general partners with capital to invest on its behalf). We study the implications of this structural choice on i) scope of investments, ii) balance between strategic and financial objectives, iii) performance measurement, iv) deal sourcing and due diligence, v) post-investment involvement of the corporation, vi) HR issues, and vii) exit considerations. We conclude with recommendations for corporations on when to employ internal versus external CVC structures.
Corporate Venture Capital