Why Partner with a Corporate Venture Capital ("CVC") Platform?
A CVC Platform allows for the strategic execution of an in-house CVC paired with the expertise and stability of an external investor.
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A Mutually Beneficial Relationship
Given technology’s impact on customer and employee expectations, companies can no longer rely on their existing capabilities to stay ahead of the competition. They need to look externally for partners that can help create new solutions at today’s pace of change; a process known as open innovation.
Top companies adopt open innovation to enhance technology adoption and have achieved success by collaborating with early-stage companies (especially) because they possess the advanced technology skills required to develop new tools, products, and services.
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That said, collaboration between early-stage and existing businesses is not an easy task. For either party. Each operates at a different pace with different goals, incentives, resources, timelines, and languages. This can cause confusion and frustration for both parties, slowing growth into new markets or customer segments.
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CVC is an effective way to bridge that gap. On top of funding the scout function necessary to find good external partners, CVC aligns the existing and early-stage companies. If done well…
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Startups with Corporate Backing Have a Higher Likelihood of Survival
Research has shown that if a corporation invests in an early-stage company the chances of success and survival for that company increases in comparison to the traditional venture capital model.
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Venture Capital ("VC") Strategies Available to Corporate Innovators Today
Historically, corporate innovators have pursued two VC strategies: traditional VC funds and in-house CVC.
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Traditional VC provides connectivity to innovation hubs and may offer superior financial returns but does not deliver the strategic benefits and alignment corporate innovators are looking for as it is difficult to effectively manage the various (possibly competing) strategic priorities of their many investors.
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Over the last decade, CVC has become a major source of innovation as thousands of organizations have started using the strategy, but with varying degrees of success and sustainability. While these in-house CVC units offer investment control and improved strategic alignment over traditional VC funds, they are often beset with autonomy conflicts, compensation issues, and constantly shifting corporate leadership and/or priorities.
Enter the Next Evolution of the CVC Model: The CVC Platform
The Skill & Agility of a Traditional VC with the Alignment & Control of an In-House CVC
Our approach dedicates a team of experienced investors to your organization that collaborate to identify and pursue innovation opportunities aligned with your strategic goals.
We scout the best early-stage companies relevant to those goals and invest in the companies that earn a commercial relationship. We manage the resulting portfolio to positive financial returns so the resulting capital can be recycled into a lasting innovation program that creates a defensible competitive advantage.
We Serve Companies Working in Heavy Industry & Infrastructure
VC tends to focus on technology categories – insuretech, consumertech, fintech – that focus on software businesses. They intentionally stay away from hardware innovation because of its added complexity. This has created a drag on innovation in more traditional capital-intensive businesses.
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Band is bridging that gap by bringing the power of CVC to those in heavy industry and infrastructure verticals looking to innovate in the digital economy. While software may ultimately ‘eat the world’, it can’t replace the services humanity needs to thrive that heavy industry and infrastructure provides.
