Courtney York Examines Trends in Corporate Venturing for Texas Lawyer
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Akin Gump corporate partner Courtney York has written the article “The Current Trends in Corporate Venturing” for Texas Lawyer, in which she explores some of the key trends relating to corporate venture capital.
York writes that corporate venturing typically involves “a minority investment in an early-stage company by a larger corporation.” Companies might consider corporate venture capital (CVC) transactions, she says, “as a supplement or alternative to internal research and development activity because these minority investments can involve lower costs and risk, while startups may value securing a commercial ally in addition to a source of funding.”
The trends York currently sees include the following:
- CVC activity continues to grow
- disruptive technologies are significant reason for increased CVC activity
- the number of CVC entities continues to rise
- evolving structure of CVC arms
- increased variety of investments
York concludes by noting that continued expansion of corporate venturing “has the potential to displace some institutional VC activity, although in practice much corporate venturing activity takes place alongside VC co-investors.” As a result, she writes, “the proportion of CVC investments relative to all venture capital activity is rising.” The more interesting issue to watch for, York says, is how this trend will impact private equity investments in the coming years.
To read the full article, please click here.