Go West: Venture Financing and Business Expansion Projects in the United States
In a time of ever-shorter innovation cycles and the increased digitalization of many value-added chains, established businesses need to constantly evolve and reinvent themselves – even going so far as to rethink their core business.
Corporate Venturing, especially Corporate Venture Capital (CVC), can play a key role in the corporate innovation portfolio. CVC is the financing of innovative startups by established corporate investors. CVC offers corporate investors the opportunity to access new technologies and trends, and to gain important experiences in new market segments. If Corporate Venturing is implemented properly, it can also help nurture the corporate‘s intrapreneurship initiatives and offer attractive alternative development opportunities to the corporate‘s top talents.
In 2016, there were record high levels of CVC investments in the United States. According to KPMG, more than 53 new CVC dedicated units made their first investments in the first half of 2016 alone.
It’s not only corporate investors from the technology and pharmaceutical sectors that are investing in startups, but players from more traditional sectors as well. For example, United States-based General Mills and Campbell‘s Soup have recently launched their own CVC units. The number of CVC investors is also increasing in Germany, as more medium-sized companies are becoming open to the idea of innovative investments. In early 2016, for instance, our client Aesculap, an international leader in medical technology, helped to establish Neuroloop, alongside the Technology Transfer Office of Freiburg University and an academic founding team. Neuroloop will develop an innovative neurostimulator technology in an agile startup environment. This was one of the largest university spinoffs in Germany to date.
With our long-standing experience in global CVC investments, we want to share our insights into the structures, challenges, and success factors of CVC from a lawyer‘s perspective. We hope you enjoy this brief guide. If you would like to discuss it further, please do not hesitate to contact us. We constantly strive to reinvent and redefine ourselves together with our clients.
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