The relationship between entrepreneur and investor has seen a major shift over the last decade. Today’s entrepreneurs want to forage long-term partnerships with the most experienced experts in their industries, and seek out investors who can provide value beyond capital and access to external partner networks.
Earlier this year, we conducted an online qualitative brand audit and surveyed 100 entrepreneurs and investors outside of Verizon’s network to better understand general awareness and perception of CVCs and gain deeper insights into what entrepreneurs need and expect from CVCs.
Below are our top three key findings:
What are the most important attributes in CVCs?
Respondents reported value added services and the investors’ reputations were the most important traits to look for in a CVC. This shows a mix of importance for the character of the corporate arm as well as the unique value added created by the VC.
Here at Verizon Ventures, we emphasize we are more than a financial partner, but also a business partner with a variety of benefits to our startups including a connection to our product team to provide technical expertise or access to internal technology, a connection to our business development teams to provide strategic business advice, among other services. Read more about how we supported past portfolio company Skyward.
What is the general perception of CVCs?
A majority of respondents believe that CVCs should provide access to external networks including customers, partners and additional investors as well as internal networks including corporate business units.
This type of access typically provides startups a larger web of connections traditional venture capital cannot. As the venture arm of a Fortune 50 company, we have partners and customers all over the world looking to integrate cutting edge technology. This provides value to help startups scale beyond capital.
Most Important Factors When Selecting a CVC
According to respondents, peer recommendations and strategic alignment were considered the top two most important factors when choosing a CVC. Especially in the relatively small community of venture capital, it's important to work with the highest standards when working with entrepreneurs and other investors to ensure you’re giving them the best services possible.
From this survey, we can conclude that the strongest asset a CVC has is its corporate counterpart or LP. Being able to integrate portfolio companies into corporate business units to assist with building out strategic business and technology development as well as providing access to the corporates larger network is the most valued service CVCs can promote when engaging with current or new portfolio companies.
Ensuring communication and seamless processes between venture and corporate will go a long way in strategic investing.