WHAT IS CORPORATE VENTURE CAPITAL?

CVC firms are corporately-owned investment firms that provide startups with capital in exchange for equity. Where VC firms typically focus solely on delivering the highest financial returns to investors, CVCs tend to have a more strategic interest in investing in companies. These investments can help brands better understand a new business line, technology, or model while providing access to talent and technology otherwise unavailable. CVC investments allow brands to participate in more disruptive research and development than typically occurs “on the balance sheet.”

WHY SHOULD MARKETERS CARE?

When brands make capital investments, they position themselves to benefit in several ways. CVC investments are generally smaller and therefore less risky than mergers and acquisitions. The investments provide a great way to experiment in a new category or business model, and investors have the first opportunity or right of refusal when a startup is ready to go commercial.

 

Investing firms gain “hands-on” experience in new technology, media, or whatever is the focus of their investment. CVC investments often include resources, such as marketing expertise, that accelerate startup success. There are also built-in mentoring relationships between the investing firm and the startup that facilitates a healthy exposure; investors can learn from the startup cultures and vice versa.

HOW CAN IT HELP YOUR BUSINESS?

A CVC initiative can provide several strategic advantages to a firm. It is an affordable way to “future proof” a business by investing in new platforms or lines of business. It provides a method for testing different ways of moving forward without having to go “all in” on an acquisition.

 

A CVC investment has the potential to imbue a brand’s customer insights into a product as it’s being built while also creating the potential for new stream of revenue.

The Truth About Innovation, with IPG Media Lab

IPG Media Lab works with some of the world’s largest brands to drive innovation in media, marketing, and business models. As the dedicated innovation initiative of the UM family of agencies, they’ve worked with companies of all sizes, across numerous verticals. Chad Stoller and Adam Simon of IPG Media Lab discussed the types of conversations they have with marketers around innovation, gave us a behind-the-scenes look at how IPG Media stays innovative, and asked whether one can truly measure innovation success.

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iOS 14: Friend or Foe? Breaking Down the Effects of Apple’s New Privacy Policies

There’s more uproar in the data privacy world: Apple has announced that with their newest update to iOS 14, the previously optional Limit Ad Tracking function (LAT) will now be on as a default. This will force all apps and app developers to ask permission to use a user’s data or track their movement, and they’ll need to opt-in to sharing a unique device code, or the ID for Advertisers (IDFA). As Apple has said on their official iOS 14 info page: “Privacy is a fundamental human right and at the core of everything we do. That’s why with iOS 14, we’re giving you more control over the data you share and more transparency into how it’s used.”

Advertisers use the IDFA to target audiences and measure effectiveness. Just like with the cookie’s demise (as we’ve discussed here), the potential for the IDFA to be limited or disappear completely will hinder the reach and understanding advertisers have over their campaigns. Marketers will not only need to survive without cookies in their diet, but they’ll also need to find new—or in many cases, old—ways to gather audience data to aid in their targeting efforts. It may be best summed up in Apple CEO Tim Cook’s remarks on International Privacy day: "Technology does not need vast troves of personal data stitched together across dozens of websites and apps in order to succeed. Advertising existed and thrived for decades without it, and we're here today because the path of least resistance is rarely the path of wisdom. If a business is built on misleading users on data exploitation, on choices that are no choices at all, then it does not deserve our praise. It deserves reform.” The resources collected discuss a post-IDFA world and what marketers can do to adapt without it.

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WHAT IS CORPORATE VENTURE CAPITAL?

CVC firms are corporately-owned investment firms that provide startups with capital in exchange for equity. Where VC firms typically focus solely on delivering the highest financial returns to investors, CVCs tend to have a more strategic interest in investing in companies. These investments can help brands better understand a new business line, technology, or model while providing access to talent and technology otherwise unavailable. CVC investments allow brands to participate in more disruptive research and development than typically occurs “on the balance sheet.”

WHY SHOULD MARKETERS CARE?

When brands make capital investments, they position themselves to benefit in several ways. CVC investments are generally smaller and therefore less risky than mergers and acquisitions. The investments provide a great way to experiment in a new category or business model, and investors have the first opportunity or right of refusal when a startup is ready to go commercial.

 

Investing firms gain “hands-on” experience in new technology, media, or whatever is the focus of their investment. CVC investments often include resources, such as marketing expertise, that accelerate startup success. There are also built-in mentoring relationships between the investing firm and the startup that facilitates a healthy exposure; investors can learn from the startup cultures and vice versa.

HOW CAN IT HELP YOUR BUSINESS?

A CVC initiative can provide several strategic advantages to a firm. It is an affordable way to “future proof” a business by investing in new platforms or lines of business. It provides a method for testing different ways of moving forward without having to go “all in” on an acquisition.

 

A CVC investment has the potential to imbue a brand’s customer insights into a product as it’s being built while also creating the potential for new stream of revenue.

“Venture Capital itself is likely not changing from its current model, but I do believe the future will see every Fortune 1000 company having a play in Corporate Venture Capital and new models for venture capital that don’t require a company to exit through IPO or M&A only.”

Dave Knox

Strategic Advisor

Predicting the Turn

Podcast

Corporate Venture Capital, with Jessica Peltz of MDC Ventures

Pciture of Matt Sweeney CEO of Xaxis North America

Jessica Peltz

In the quest to keep up with technological advancements, brands are beginning to enter the world of venture capitalism to "get in on the ground floor" of the next game-changing innovation. But what type of partnerships make sense for brands, whose objectives aren't quick profit, but learnings and competitive advantages? And how does a brand even enter this space? We spoke with Jessica Peltz of MDC Ventures, who shared her journey into the world of Corporate VC, and discussed some tech developments marketers should keep an eye on.

Related Content

Want to take a deeper dive into corporate venture capital? ANA Members have access to brand stories, case studies, and expert webinars you won't find anywhere else. 

Corporate Venture Capital: Finding Your Path to Success

Forbes. October 2019

Venture investor Bedy Yang shared how her thoughts on Corporate Venture Capital have evolved over the years, and how many CVC firms have shed the reputation for being slow-moving and strategy deficient. She also provided tips for brands looking to enter the space.

Making Corporate Venture Capital Work 

MIT Sloan. June 2019

Corporate venture capital is steadily rising in the market. While technology giants like Google, Intel, and Salesforce were the most active investors, CVC units have been established by corporations across the globe in many industries beyond tech. Johnson & Johnson, Mitsubishi, Robert Bosch, Unilever, Novartis, and Airbus are just a sample of corporations that recently established CVC activities.

The Takeover of Corporate Venture Capital

VC Cafe. June 2019

Today 77% of Fortune 100 companies (Top 100 US Companies based on Revenue) invest in venture capital, and 52% of Fortune 100 companies have their own investment arms. The large tech companies like Intel (Intel Capital), Google (GV, Capital G, Gradient Ventures), Salesforce (Salesforce Ventures) or Microsoft (M12) are amongst some of the most active investors in tech, and have demonstrated strong financial performance to date.

Download Now!

CVC firms are corporately-owned investment firms that provide startups with capital in exchange for equity. Where VC firms typically focus solely on delivering the highest financial returns to investors, CVCs tend to have a more strategic interest in investing in companies.
 
ANA Marketing Futures spoke to marketers and experts across industries to get their opinion on the value and viability of this emerging trend, and created a guide to help brands invest in a brighter future.

DaveKnox

Strategic Advidor

Predicting the Turn

“Venture Capital itself is likely not changing from its current model, but I do believe the future will see every Fortune 1000 company having a play in Corporate Venture Capital and new models for venture capital that don’t require a company to exit through IPO or M&A only.”

Key Stats

ANA Marketing Futures and eMarketer have come together to deliver key stats and forecasts on the trends that will shape the industry for years to come.

Related Content

Want to take a deeper dive into corporate venture capital? ANA Members have access to brand stories, case studies, and expert webinars you won't find anywhere else. 

Corporate Venture Capital: Finding Your Path to Success

Forbes. October 2019

Venture investor Bedy Yang shared how her thoughts on Corporate Venture Capital have evolved over the years, and how many CVC firms have shed the reputation for being slow-moving and strategy deficient. She also provided tips for brands looking to enter the space.

Making Corporate Venture Capital Work

MIT Sloan. June 2019

Corporate venture capital is steadily rising in the market. While technology giants like Google, Intel, and Salesforce were the most active investors, CVC units have been established by corporations across the globe in many industries beyond tech. Johnson & Johnson, Mitsubishi, Robert Bosch, Unilever, Novartis, and Airbus are just a sample of corporations that recently established CVC activities.

The Takeover of Corporate Venture Capital

VC Cafe. June 2019

Today 77% of Fortune 100 companies (Top 100 US Companies based on Revenue) invest in venture capital, and 52% of Fortune 100 companies have their own investment arms. The large tech companies like Intel (Intel Capital), Google (GV, Capital G, Gradient Ventures), Salesforce (Salesforce Ventures) or Microsoft (M12) are amongst some of the most active investors in tech, and have demonstrated strong financial performance to date.

Download Now!

CVC firms are corporately-owned investment firms that provide startups with capital in exchange for equity. Where VC firms typically focus solely on delivering the highest financial returns to investors, CVCs tend to have a more strategic interest in investing in companies.

 

ANA Marketing Futures spoke to marketers and experts across industries to get their opinion on the value and viability of this emerging trend, and created a guide to help brands invest in a brighter future.

About ANA Marketing Futures

Knowing that marketers are increasingly challenged in their efforts to keep up with the latest trends and technologies, the Association of National Advertisers (ANA) tasked itself with creating a program designed to help marketers anticipate—and prepare for—the future of marketing.

 

ANA Marketing Futures is what emerged. With a focus on innovative topics and emerging trends, ANA Marketing Futures provides resources that will influence and inform via member cases, research studies, and insight from industry innovators. Check back often to learn about emerging trends and become inspired to take steps toward the growth of your business.

 

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