Corporate Venture Capital: And Its Rise Across Sports
Understanding the history, goals, sports firms, and continued influence by corporate venture capital firms.
An interesting trend 𝘪𝘯 𝘴𝘱𝘰𝘳𝘵𝘴 is Corporate Venture Capital (CVC)...
Just last week, Red Bull announced a $200m vehicle to deploy into categories in and around sports.
*I’ve uncovered 30+ other CVC arms in the sports industry. The full list is available for Profluence Community Members on our platform.
Let’s explore what CVC is, why it’s good for sports, and break down some of the most active ones in sports.
Let’s Dive In 👇
Corporate Venture Capital
Corporate Venture Capital - also known as Corporate Venturing - began in 1914, when Pierre S. Du Pont's company invested in General Motors.
So, how’s it defined?
Corporate venture capital (CVC) is the investment of corporate funds directly in external startup companies.
"practice where a large firm takes an equity stake in a small but innovative or specialist firm; the objective is to gain a specific competitive advantage”
CVC is not an investment made through an external fund managed by a third party, even when a single investing company funds the investment vehicle.
CVC is not synonymous with venture capital (VC) but is a specific subset of venture capital.
The CVC division often believes it has a competitive advantage over private VC firms due to what it considers to be:
its strong balance sheet
ability to be a patient investor
superior knowledge of markets and technologies
Due to its hybrid nature involving both elements of corporate rigidity and startup culture, managing a successful CVC unit is a difficult task that involves many hurdles (and often fails to deliver the expected outcomes).
Example CVC Success
Intel Capital, the semiconductor giant's investment arm, loves to make something called “enabling investments”.
Back in the early 1990s, Intel realized it could benefit from nurturing start-ups making complementary products — demand for them could spur increased demand for Intel’s own microprocessor products.
So Intel invested in hundreds of companies across:
video
audio
software
graphics hardware
All of these required increasingly powerful microprocessors inside the computers they ran on, thereby stimulating sales of Intel Pentium chips.
Sports Corporate Venture Capital
As sports becomes more of an asset class…