Morgan Lewis/CB Insights Report: Corporate Venture Capital Investors Are Bullish on Technology Partnering and Scouting Deals

Volume & Value of Corporate VC Deals Hit Multi-Year Highs in 2015 

PALO ALTO, Calif., September 10, 2015: Corporate venture capital (CVC) deals increased by 25% year-on-year between 2013 and 2014 and shot up 77% in dollar value in the same period—a trend continuing this year that shows a bullishness on technology partnering and scouting deals, according to the first-ever Corporate Venture Capital Term Sheet Survey developed by Morgan Lewis and CB Insights.

Recognizing the increasingly important role corporate venture capital (CVC) programs play in the venture capital landscape, Morgan Lewis developed the survey in partnership with CB Insights for clients and others interested in the trends and factors that distinguish CVCs from traditional venture capital financing transactions. The report covers the largest financings in the United States in the first quarter of 2015—including high valuation “unicorn” deals by companies that reach a $1 billion dollar market value—and key economic terms.

The report found that, in the first quarter of 2015, CVCs participated in 178 deals totaling $3.6 billion—the highest Q1 deal total in any of the last four years and up 11% from Q1 last year. Key takeaways include:

• Corporate investors are increasingly leading later stage financings, suggesting these investors continue to be bullish on the technology partnering/scouting deals and the market in general. Of the later-stage financings reviewed, 60% were led by a CVC investor.
• Corporate investor venture financing deal terms are surprisingly company-friendly, with fewer “control” terms than seen in earlier eras of venture financing—this is “CVC 2.0.”
• All of the deals had a step up in valuation from the prior round, which again was a bullish sign from the corporate investors. The average per-share price increase from the prior round was 150%.

Read the full Corporate Venture Capital Term Sheet Survey >>