Why Corporate VC Will Be A Critical Funding Outlet For Startups In 2025

By Neal Hansch

As we approach 2025, cautious optimism surrounds the global startup funding landscape and outlook.

With successful IPOs and exits ahead in the new year, shifting market dynamics, evolving priorities and continuous technological advancements — especially around artificial intelligence — new opportunities are opening for startup founders.

For startups around the globe, corporate venture capital, or CVC, continues to offer not just capital but also the potential for impactful strategic collaborations, positive proof points, access to critical resources, and pathways to navigate the complexities of scaling.

An optimistic economic outlook

While macroeconomic challenges will persist, the broader economic landscape heading into 2025 appears more promising than in recent years. Market analysts predict a positive trajectory, with institutions like Goldman Sachs forecasting 2.5% GDP growth for the U.S. This optimism is extending to the venture capital market, which could see more robust IPOs, an uptick in M&A, and, as a result, increased venture fund activity.

Corporate venture arms are uniquely positioned to thrive in this climate. When a corporation’s core business performs well, there’s typically greater support for underwriting and expanding existing and/or new CVC activities. The result is a rising tide for the broader venture ecosystem, encompassing both CVCs and institutional VCs alike.

Advantages of corporate VC

CVC provides startups with financial investment and strategic opportunities, including pilot programs to test solutions, refine offerings and drive adoption. Corporate partners often offer access to established distribution channels and global markets. For founders eyeing exits, CVC can bridge the path to acquisition, aligning goals and enabling long-term collaboration.

Here are several representative examples of corporate venture investments delivering measurable success to their portfolios of startup companies:

• Customer base access: Google Ventures’ initial investment in Uber enabled seamless integration with Google Maps, boosting user access and geographical scalability
• Distribution networks: Intel Capital’s funding of doorbell maker Ring facilitated integration with Intel’s smart home ecosystem, expanding its IoT market reach
• Brand credibility: Salesforce Ventures’ 1 backing of Snowflake accelerated enterprise adoption of their services by providing credibility and access to Salesforce’s customer base
• Operational infrastructure: Walmart’s investment in Plenty ensured scalability by incorporating its produce into Walmart’s nationwide distribution networ
• Channel partnerships: Comcast Ventures supported Nextdoor with advertising resources, amplifying local community engagement
• Global expansion: SoftBank Vision Fund’s investment in DoorDash drove rapid international expansion by leveraging SoftBank’s local connections and market insights.

Startups have also benefited from tailored product/service collaborations, such as:

• Roadie and The Home Depot: Roadie expanded same-day delivery services to more than 1,300 Home Depot stores in 2020, leveraging its CVC partnership to scale operations during the pandemic.
• SoundHound and Honda Motor: Through Honda Xcelerator, SoundHound integrated its AI-powered Houndify platform into Honda vehicles, enhancing in-car experiences and creating new voice commerce opportunities.

Collaboration with CVCs

For startups considering pursuing CVC funding, preparation and understanding the common dynamics and risks/rewards of doing so is key.

• Do your homework: Research CVC partners’ portfolios, track records and recent activity levels. Craft an approach and value proposition that aligns with their stated focus areas, showing how your solution fits their needs and your orientation to partner with incumbents to achieve together the mutual full potential of the vision and opportunity at hand.
• Define success upfront: Work closely with your CVC partner to set clear goals for pilots or proof-of-concept programs or other collaborative projects. Alignment on what constitutes success will help avoid miscommunication and set the stage for scaling beyond when the initial project achieves its objectives.
• Plan for scale: Ensure that a roadmap exists for broader rollouts and expanding beyond the initial pilots. Discuss next steps and pathways to broader adoption within the corporate ecosystem.

The role of CVCs across the global venture funding landscape has continued to rise in importance this past year, as these corporate strategic investment arms serve as one key cornerstone of the global innovation economy. For startups ready to embrace collaboration and think long-term, CVCs and the value-add they can bring to the table alongside their capital, represent an unparalleled path for startups to accelerate their scaling and the speed with which they drive meaningful impact in the industries they serve.

Neal Hansch is the CEO and managing partner of Silicon Foundry, a Kearney company, where he leverages more than 25 years of venture capital, product management, technology operations, corporate development and trusted advisory experience to lead the firm. Previously, he was managing director of the emerging markets technology training, investment and incubation program at the Meltwater Entrepreneurial School of Technology, where he managed a global team of more than 150 professionals and over 20 startup investments. He began his Silicon Valley career as an investment banking analyst at Robertson Stephens & Co. during the first internet boom (and bust!). He earned his bachelor’s degree from Duke University, studied at University College London, and received an MBA from the UCLA Anderson School of Management.

Illustration: Dom Guzman