Corporate VC

Today I had a meeting with someone who works at a Corporate VC firm, which invests capital from the balance sheet of the corporation.

Historically, I had thought corporate VC's are a bit disadvantaged, since it's very difficult for the professionals to be compensated in the same way as VCs with a typical GP/LP structure.  Their compensation resembles business developement teams more than investment managers.  I am generalizing as I am sure there are exceptions.

However, this particular firm I met with just approved the same investment budget for 2009 that they invested in 2008.  This is very interesting at a time when many VC funds are haggling with their LPs and facing uncertain prospects.  I am sure that the 2009 budget for this firm will have significantly higher purchasing power than the same amount they invested in 2008.  This could be a huge advantage.

It should be interesting to watch leading corporate VC firms like Steamboat Ventures and Intel Capital through this recession.

PS. There was also talk of Google formalizing its VC activity.  I had not heard much about that lately…

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