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What should startup founders know before negotiating with corporate VCs?

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Corporate venture capitalists (CVCs) are booming in the startup space as large companies look to take advantage of the fast-paced innovation and original thinking that entrepreneurs offer.

For startups, taking funding from CVCs can come with many benefits, including new opportunities for marketing, partnerships and sales channels. Still, no founder should consider a corporate investor “just another VC.” CVCs come with their own set of priorities, strategic objectives and rules.

When it comes to choosing a CVC with which to enter negotiations, the most important step is doing your own diligence beforehand. An entrepreneur’s goal is to find the perfect match to partner with and guide you as you grow your business. So before you start discussing terms, you’ll want to understand what’s driving the CVC’s interest in venture investing.

While traditional VCs are purely financially driven, CVCs can be in the venture game for a variety of reasons, including finding new technology that might generate marketplace demand for their products. An example is Amazon’s Alexa fund, which invested into emerging companies that drive use and adoption of Alexa. Alternatively, a CVC’s parent company may be looking to invest in tech that will help them operate their own products more efficiently, such as Comcast Ventures investing in DocuSign.

As a rule of thumb, the bigger CVC funds like GV and Comcast tend to be financially driven, meaning they’ll be approaching negotiations through a financial lens. As such, the negotiating process more closely resembles an institutional fund. You as a founder have to do the work to figure out what’s driving your CVC — is this a customer acquisition or distribution opportunity? Or are they seeking to find a source of knowledge transfer and/or bring new tech into their parent company?

“Before negotiating, always look at a CVC’s existing portfolio,” says Rick Prostko, managing director at Comcast Ventures. “Have they made a lot of investments, at what stage, and with whom? From this information you’ll see the strategic thinking of the CVC, and you can determine how best to position yourself when you begin negotiations.”

Source: https://techcrunch.com/2020/05/26/what-should-startup-founders-know-before-negotiating-with-corporate-vcs/

Private Equity

Valor Equity Partners passes $1bn in fifth flagship fundraise

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Growth-focused private equity house firm Valor Equity Partners has passed the $1bn-mark for its fifth flagship fundraise

Source: https://www.altassets.net/private-equity-news/by-pe-sector/buyout/valor-equity-partners-passes-1bn-in-fifth-flagship-fundraise.html

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Private Equity

Align Capital follows $450m Fund II close with deal for PE-backed-business advisory firm WilliamsMarston

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Align Capital has followed the $450m hard cap close of its sophomore private equity fund earlier this year by backing ac

Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/align-capital-follows-450m-fund-ii-close-with-deal-for-pe-backed-business-advisory-firm-williamsmarston.html

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Private Equity

EQT sells Fund VII investment to EQT VIII, IX and TA Associates in €3bn-plus deal

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EQT has agreed to sell its EQT VII investment IFS to its successor funds EQT VIII and EQT IX alongside new backing from

Source: https://www.altassets.net/private-equity-news/by-news-type/deal-news/eqt-sells-fund-vii-investment-to-eqt-viii-ix-and-ta-associates-in-e3bn-plus-deal.html

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