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Corporate venturing as a major corporate strategic initiative

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  1. Abstract
  2. Introduction and overview
  3. Background
    1. Why companies employ venture groups
  4. Examples of corporate venturing
  5. Drivers of corporate venturing success
  6. Track record of venturing
  7. Venture processes
  8. Stages of development reached by six ICV projects
  9. Venture strategies
  10. Venture leadership
  11. Product championing and ICVs
  12. Venture teamwork
  13. Managing new venture disappointment
  14. Key success drivers in corporate venturing
  15. Securing resources for new venture groups
  16. Summary and future research directions
  17. References

This paper reviews selected literature on internal corporate venturing in order to help build a venture management framework for scholars as well as managers. It includes a discussion of the various definitions authors have proposed, corporate venturing success drivers, and the different internal corporate venturing processes used by companies. We also identify several best practices for ensuring a successful internal corporate venturing project via a diversified venture portfolio that considers both risks and rewards. We also identify some of the qualities that team leaders and team members often exhibit to ensure that ventures are successfully managed. We also note that many internal corporate ventures are not successful. However, without risk-taking and initiating new ventures, companies are unlikely to experience success in their major innovation initiatives. Our paper presents current theoretical and managerial thinking about what it takes to successfully initiate and manage new corporate ventures. Key Words: Corporate venturing, internal ventures, innovation, business and market development.

[...] Mason and Rohner (2002) created a framework to assist companies in managing the flow and management of ideas (see Figure Figure Corporate Venturing Opportunity Filters Strategic Criteria Relevance Adjacencies Sponsor Current vs. Future Sustaining vs. Disruptive Strategic Filter Portfolio Criteria Value Synergy Cash Portfolio Filter Systematic vs. Opportunistic Seed vs. Expansion Venture Criteria Bell-Mason VDF Market Positioning Valuation Active vs. Passive Merge vs. IPO Venture Filter Mason, H. and T. Rohner 2002. The Venture Imperative: A New Model for Corporate Innovation. [...]

[...] and Van de Ven, A An Empirical Evaluation of the Internal Corporate Venturing Process. Strategic Management Journal 13: 93-109. George, R. and MacMillan, I Corporate Venturing: Venture Management Challenges. Journal of Business Strategy 85-91. Gompers, P Optimal Investment, Monitoring, and the Staging of Venture Capital. Journal of Finance 50: 1461-1489. Gompers, P Corporations and the Financing of Innovation: The Corporate Venturing Experience. Economic Review Federal Reserve Bank of Atlanta Gompers, P. and Lerner, J The Use of Covenants: An Analysis of Venture Partnership Agreements. [...]

[...] 13 Corporate venturing should be based on a portfolio of investments (either internal or external) and should set forth specific financial and strategic metrics and milestones (Mason and Rohner 2002) Managing New Venture Disappointment 11.2 Even with all of the above strategies in place, some ventures will inevitably fail. Having experienced a venturing disappointment, senior managers face a further challenge, namely to ensure that something is done about it. Observation in the field suggests that managerial recognition of a problem and the subsequent decision to do something about it is not necessarily followed by organizational action, and the more senior the manager, the more likely this appears (McGrath 1995) An article by McGrath (1995) utilizes the trajectory template to assess venture performance in three crucial arenas: the external marketplace, the internal marketplace of the firm, and the competitive arenas wherein ventures are pitted against one another The sample for this study consists of 23 corporate ventures initiated within a single U.S.-based financial services company. [...]

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