Because senior management may have a deep understanding of the sector and the specific needs of the corporate sponsor, it seems easy to assume that involving them in the selection process will help the corporate venture capitalist (CVC) pick the right startups to support.

However, that is not the case. I will explain. As part of due diligence, a skilled venture capitalist confirms market demand by talking to a startup’s potential customers. Sector-focused investors can quickly get a feel for what customers in their sector are interested in and what they are leaning into from an investment standpoint. So,…

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