Risky Business
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Risky Business

Can Corporate Venture Capitalists Help Startups Go Public?

A majority of venture-backed IPOs have corporate investors

% of VC backed IPOs with a corporate VC backer

Methodology

Our hypothesis was that startups might benefit from CVC funding in ways that could make them more likely to go public. We looked at the venture-backed IPOs of the past 15 years to see whether CVC backing correlated with a greater likelihood of IPO.

IPOs by the number of corporate investors
Distribution of industries in our sample of IPO companies

Results

Our results show that 61.0% of the companies analyzed had at least one CVC investor before their IPOs. This stands in contrast to just 13.3% of venture-backed deals receiving CVC funding over the same time period, a 4.5x over-representation. Furthermore, in 12 out of the 15 years we analyzed, the number of CVC-backed companies that went public either equaled or was greater than the total without CVC participation. The consistency of this correlation suggests that CVC backing could be related to completing an initial public offering.

The number of companies that went public each year, sorted by those with a CVC backer vs. those without

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Thoughts on corporate VC from the team at Touchdown Ventures, the leading provider of managed venture capital for corporations.

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Selina Troesch

Touchdown VC Principal. Venture Capitalist. USC MBA. Silicon Valley Native. Swiss Miss. Lifelong Dancer.