now is the time for corporate venture

We do a lot of work with larger corporate clients – incumbents looking to understand or harness some form of innovation, or perhaps bring it to market. As an extension of this, we often provide updates on the state of venture capital. This post is inspired by a talk I gave recently to such a client.

Venture capital investment has peaks and valleys, generally correlated with the macro economy, or more importantly, with sentiment about that economy. (This itself is subject for a separate post – perhaps our man Jay Goldberg could put something together on the correlation between interest rates, sentiment, and venture investment.)

This is as shown below, with data provided by the NVCA.

ventureinvestmentsince1995

So, too, does corporate venture investment. It follows a sawtooth. Notably, corporate venture investment – measured by deals with CVC participation, shown in the pale blue line below – reached 1999 and 2008 levels last summer and has stayed there.  Fomo? Venture tourism? Maybe. Maybe not. That’s not the subject of this post.
corporateventureinvestmentsince1995

While 2015 venture investment was up, Q4 dropped, as shown below. The skittishness has begun. (Along with a lot of posts about gored unicorns. Schadenfreude is ugly. Let’s stop it. It was funny, like, once.)

2015vcinvestment

So, VCs are getting shy. Money, when harder to get, is worth more; venture dollars in particular are worth more. Now is the time for corporate venture.

– Jon