What Startups Get Wrong About Corporate Venture Capital
Over the past few months, I’ve been working inside a corporate venture capital (CVC) team at MANN+HUMMEL Ventures. It’s been a crash course in how strategic investors think, what they look for, and where things often break down with startups.
CVCs can be great partners — they bring industry expertise, long-term vision, and the potential for real commercial partnerships. But founders often approach these conversations with the wrong expectations, or worse, without understanding how different CVCs actually operate.
Here are a few of the biggest misconceptions I’ve seen:
1. “Corporate VC = Strategic Only”
Not all corporate VCs are purely strategic. Some behave a lot like traditional financial VCs. Others only invest if there’s a clear commercial tie-in. Some do both. It varies — a lot.
The key is: don’t assume. Ask questions. Try to understand their mandate:
Do they need business unit support to invest?
How do they measure ROI — financial returns, strategic alignment, or both?
Are they comfortable leading or only following?
Knowing the answers will save both sides time.
2. “If We Get CVC Money, We’ll Get a Commercial Deal Too”
This one is tricky.
Yes, a corporate VC might help unlock commercial opportunities. But the investment team and the business unit often operate independently — especially in large organizations.
A CVC check does not guarantee a partnership, a pilot, or a supply agreement. If anything, corporate processes tend to slow things down. You're still going to have to work the internal sales cycle, just like anyone else.
Beyond a commercial agreement, seek out opportunities for joint development or growth together. The relationship can go far beyond an investment check and can lead to positive outcomes for both parties involved.
So go in with eyes open. Treat the investment as one part of the relationship — not the whole thing.
3. “Corporate VCs Will Slow Us Down”
Some might. But that’s not universal.
In our case, we move at startup speed. We’ve done deals on timelines that match financial VCs. We’ve made decisions quickly when there was conviction. And when we’re the right partner, we try to be helpful beyond the check — through technical insight, market access, and long-term alignment.
That said, if a CVC needs multiple layers of approval or is tied up in bureaucracy, that’s worth knowing early. Don’t be afraid to ask:
“What does your investment process look like?”
“Who needs to say yes?”
4. “Taking CVC Money Will Scare Off Other Investors”
It depends on the terms.
Other VCs might hesitate if your CVC investor has aggressive rights (like exclusive access, ROFR/ROFO, or vetoes over future partnerships). But many corporate VCs — especially the experienced ones — know better than to overreach.
It’s worth having an honest conversation about how the CVC views follow-on funding, board involvement, and partner rights. If they're reasonable, most good financial VCs won’t mind — and may even see it as validation.
5. “Corporate Investors Are Just Tourists”
There are some CVCs that dip in and out of the market based on boardroom trends or macro cycles.
But there are also groups — like ours — that are deeply committed to supporting innovation in their space, building long-term partnerships, and doing the work to understand the startup journey.
Founders should evaluate CVCs just like any other investor:
Are they consistent?
Are they clear about what they bring to the table?
Do they follow through?
The best ones behave like true partners — even if the incentives are a bit different.
Final Thoughts
Corporate VC can be a great source of aligned capital — but only if both sides understand what they’re getting into.
If you’re a founder considering a CVC investor, the best thing you can do is treat it like any other strategic relationship. Ask questions. Understand incentives. Be realistic about timelines. And make sure you know who’s on the other side of the table.
You’ll save yourself time — and find better-fit partners in the process.
