Venture capital: partnering with the big guys - Open for Business

Major corporations are investing in venture capital with a vengeance.?

Afterall, why invest in in-house R&D when you can take advantage of?small startups' speedy, efficient approach to?innovation??

One of the most recent entrants is The BMW Group which has launched a $100 million New York-based fund to invest in young companies that can expand BMW's knowledge in sustainable and mobile. Last year, corporations invested $1.9 billion U.S. in venture capital in the U.S. -- nearly nine per cent of all venture capital investing and approaching a historical high water mark, according to Robert Ackerman Jr. in Entrepreneur Corner.

But corporations have a history of jumping in and out of venture capital investing, Askerman said. This is?usually because they have a short-term, quarterly financial results focus, while venture capital needs a long-term, multi-year focus.? In a typical 10-year life span of a VC investment, there may be as many as three different teams of senior management at many major corporations, each with different priorities and goals. Corporations and startups operate at different speeds and that can make for uneasy marriages.

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Source: http://communities.canada.com/vancouversun/blogs/smallbusiness/archive/2011/05/16/venture-capital-partnering-with-the-big-guys.aspx

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