Corporate Venture Capital: Bridging the Equity Gap in the Small Business Sector

Since the start of the 1980’s there has been a significant rise in the number of forms of collaborative pressures in the global market-place. One form of collaboration is Corporate Venture Capital Investment, or Corporate Venturing. This involves large, non-financial companies taking minority equity stakes in small unquoted firms, and can be beneficial for both parties. The levels of corporate venturing are, however, reportedly low in the UK, particularly when compared to levels in the USA. This volume addresses the lack of academic and practical research into corporate venturing by examining the role of this activity as both a form of large firm-small firm collaboration and as an alternative source of equity finance for small firms. These issues are explored through surveys of independent fund managers, corporate executives and technology-based firm directors. The author finds corporate venturing to be a valuable source of equity finance for early stage, technology-based firms, as well as for the institutional venture capital funds which specialise in investing in such ventures. Implications for both academic theorists and practitioners are considered.