Most large corporate venture capital funds invest in startups at the Series A stage, but some are planning to invest at an earlier stage, the survey shows.
A study by accelerator and advisory firm Mountside Ventures found that 90% of corporate venture capital (CVC) funds invest in Series A rounds.
CVC is a subset of VC where a company invests equity in a startup.
Following a growing trend of VC investments in artificial intelligence startups globally, the report found that around 40% of CVCs surveyed are investing in B2B companies focused on AI and machine learning.
The survey of over 1,200 start-ups and 100 global CVC investors managing more than £20 billion in venture capital assets suggests there is an appetite to invest at an earlier stage. 65% said they plan to continue investing at the same stage, while 18% said they plan to invest earlier.
The report also found that there has been a “notable” increase in CVC participation in deals since 2010, rising from participation in 1 in 10 deals to 1 in 4 by 2024.
“What’s clear from this report is that the supply of corporate capital to startups has never been higher,” said Tom Savage, investment associate at Mountside Ventures. “Our analysis shows that strategic alignment is being prioritised over financial returns, which can lead to misaligned expectations during the growth phase and the exit process.”
According to the report, this increase is due to CVCs seeking to access the latest technologies and market trends and remain at the forefront of global innovation.
Founders seeking access to strategic resources such as unique R&D capabilities, long-term partnerships, exit strategies and market validation are also seeing the benefits of working with CVCs and are reportedly considering raising capital from them rather than traditional VCs.
This could be because traditional VCs typically look to exit an investment in five to seven years, while CVCs tend to take a longer-term view.
