A guide to choosing the right corporate investment for entrepreneurs
After a decade of easy money, start-ups are suddenly facing a strange new reality: funding is drying up. Global venture funding fell by 23 percent to US$108.5 billion in the second quarter of the year – the second-largest drop in a decade. Although the figure is still higher than levels seen before the pandemic, entrepreneurs could be forgiven for feeling more anxious about their venture being starved of financial backing.
The landscape has its bright spot though, and that is the rise of corporate venture capital (CVC). Between 2010 and 2020, the number of corporate investors grew more than six times to over 4,000. Collectively, they invested a record US$169.3 billion in 2021, up 142 percent compared to 2020. Even as investment appetite cooled in Q1 this year, there were a record 1,317 CVC-backed deals. However, funding fell 19 percent to US$37 billion.
[This article is republished courtesy of INSEAD Knowledge, the portal to the latest business insights and views of The Business School of the World. Copyright INSEAD 2024]