Gaining parent company support of corporate venturing—as a concept and on individual deals—is the most significant challenge facing today’s corporate venture capital (CVC) professionals, according to a survey by Ernst & Young in association with the European Private Equity and Venture Capital Association and the National Venture Capital Association.
The survey found that corporate venture funds do not view identifying investment opportunities or successfully signing deals with portfolio companies as top challenges.
Other findings include:
n 79% of respondents expect the U.S. market to be very important for CVC in the next two years (globally the United States accounted for 74% of CVC activity in the five quarters to April 2008). A quarter of respondents see Europe and China as being very important.
n 35% of respondents intend to invest in clean technology during the next year and 44% over the next five years, reflecting a growing corporate interest in climate change initiatives. Additionally, cleantech accounts for a large amount of capital with respondents allocating, on average, 41% of their capital to cleantech investments.
n Referrals from traditional venture capital firms are the most important source of deals, with 65% of respondents rating them as a very important factor.
Source: Ernst & Young Global corporate venture capital survey 2008–09, www.ey.com.