Corporate venturing units: Vehicles for strategic success in the New Europe

How should European multinationals effectively deal with the multiple challenges they face from the shifting economic landscape in Europe and an increasingly global stage for innovation? One option currently being pursued by many large companies is corporate venturing. Corporate venturing involves creating a specially designated organizational unit to seek and develop new business opportunities, often across multiple geographies. While a challenging practice to get right, the strategic benefits of corporate venturing to firms can be substantial, especially under the new rules of an emerging global market for innovation. In this paper we describe the findings of the most comprehensive international survey to date on corporate venturing. We identify three key success factors that hold across multiple sub-types of corporate venture units: giving venture units substantial autonomy, creating strong ties to the venture capital community, and structuring appropriate compensation systems. We also show how corporate venture units have adapted to the changing business environment in the years since the collapse of the dot.com bubble.