CVC Investment Committee: Effective Operations and Key Success Factors

In Corporate Venture Capital (CVC), the investment committee plays a central role in investment decisions. Recent research shows that about 90% of companies have an investment committee, and its structure and operation significantly impact the success of CVC activities.

Investment Committee Structure

According to research data, the investment committees of CVCs have two main characteristics:

1. 82% of companies have an investment committee.
2. 62% of those committees include members from the parent company.

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Key Features of Successful CVC Investment Committees

In successful CVCs, the structure and operation of the investment committee typically have the following characteristics:

1. Decision-Making Speed

• 71% of investment decisions are completed within 3 months.
• For CVCs focused on collaboration with business companies, 60% complete their decisions within 3 months.

2. Diverse Membership Composition

• Active recruitment of VC experts and external specialists.
• Appropriate collaboration with business unit leaders.
• A well-balanced mix of investment professionals and business experts.

3. Clear Delegation of Authority

• Investment decision-making authority is delegated to the CVC organization for amounts up to a certain limit.
• Flexible decision-making processes to avoid missing investment opportunities.

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Key Points for Effective Operation

In successful CVCs, the following operational guidelines are commonly observed:

1. Regular Meeting Schedule

• Regular monthly meetings.
• Flexible implementation of ad-hoc meetings as needed.‍

2. Clear Evaluation Criteria

• Evaluation from both strategic value and financial return perspectives.
• Detailed consideration of business synergies.

3. Continuous Monitoring

• Regular progress reports after investments.
• Consideration of necessary support measures as needed.

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Conclusion

The investment committee of a CVC functions not only as a venue for investment decisions but also as a crucial body for guiding strategic investments to success. Common features of successful CVCs include fast decision-making processes, diverse membership compositions, and appropriate delegation of authority. Furthermore, regular meetings, clear evaluation criteria, and continuous monitoring contribute to effective operations. Designing and operating an investment committee with these elements is a key factor in increasing the likelihood of success in CVC activities.