In recent years, the number of available venture capital funds for business startups that are coming from traditional sources has started to go down. Fortunately, there is a viable alternative – corporate venture funds.
It can be noted that a several multinational corporations have started to allot some of their funds for business startups. Latest data show that roughly around 900 corporate venture funds are currently available for new businesses. Last year, around 16 percent of companies have acquired corporate venture capital, a number that is expected to increase this year.
Corporate venture funds have been available for more than two decades now. But recently, corporations have started to embrace this trend even if it would disrupt the status quo. The reason, they can’t afford not to anything about it.
Several companies have recently declared bankruptcy or have started to vanish because it failed to recognize the changing landscape of the market. For instance, rental company Blockbuster would still be a major player if it recognized startups such as Netflix. This is similar to the case of Kodak. If only it recognized newbies Shutterfly and Instagram, it might have averted declaring bankruptcy.
Fortunately for some companies, they still have time to catch up with the situation. Nielsen, for instance, has already allotted money to fund small investments. Dell is doing the same, maintaining that it will continue investing in startups even with plans for it to be taken private.
Corporate venture capital allows public company to focus on the long term. For instance, American Express Ventures will participate in merger of e-commerce and payments industries. It is also looking for new technologies that could be utilized for the next decade.
If you are an owner of a business startup who is in need of capital, then it is a good idea to look for venture funds from corporations. Securing one would be a good thing, especially since big companies could assure a successful future for your business startup.
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