Does strategic money win better?
Strategic investors, such as Corporate Venture Capital (CVC) firms, can be attractive additions to a cap table for companies looking to demonstrate and validate industry adoption, while reducing downside risk.
🙌🏻 Domain Expertise
According to the recent State of CVC 2024 report (Silicon Valley Bank, Counterpart Ventures), 28% of global venture deals involve CVC participation. CVCs bring capital coupled with industry expertise and potentially lucrative contracts. Involving established industry incumbents can bring a stronger sense of collaboration and strategic alignment which ultimately benefit a broader portfolio of companies. For example, in financial technology, these investors provide not only capital but also regulatory support, market access, commercial partnerships and operational expertise that help companies scale profitably.
🎯 Improved Odds
Strategic investors are often looking to solve their own pain points and stay ahead of the innovation curve. They understand that real use cases, customer references and production deployments matter for enterprise value creation. This means focusing on helping startups build initial enterprise customer relationships which can be parlayed into useful testimonials to win future business.
According to the Silicon Valley Bank report, CVC-backed companies have a lower failure rate. CVC-backed startups are also twice as likely to progress to the next funding round, and ultimately exits.
🪨 GTM Efficiency
This data highlights the positive benefits of partnering with domain experts, focusing on demonstrable product market fit rather than chasing hyper-growth through high burn. In fact, strategic partnerships or the prospect of an acquisition often provide more stability and allow companies to focus on profitable scaling.
In short: at a time when sustainable growth and profitability are back in style, founders should prioritize long-term strategic investors who provide the right capital solutions, strategic insights, and partnerships that help businesses grow at the right pace. These investors play the long game, building companies that don’t just endure the journey, but define it.
