Subang Jaya – 07 February, 2022 – Corporate venturing, often known as company venture capital (CVC), is the practice of using corporate cash to invest directly in external new companies. Frequently, the definition of CVC is defined by clarifying what it is not. An investment made through an external fund managed by a third party is not considered corporate venture capital, even if it is backed by a single investing corporation. Most importantly, CVC is not the same as Venture Capital (VC); rather, it is a subset of the latter.
The purpose of corporate venture capital in Malaysia, as well as the degree to which the operations of the investment business and the startups are entwined. Despite the fact that organisations have a range of aims for their VC investments, venture capital (VC) investments often advance for one of two primary reasons. A company looking to make a strategic investment seeks to uncover and profit from synergies with a new venture. The financial aim is the second type of investment goal, in which a company is primarily looking for big returns.
There are a few benefits of corporate venture capital funding. Firstly, corporate venture capital funds can help a company gain access to existing clients and achieve product/market fit more quickly. Secondly, forming a commercial agreement after market validation might help a company generate much-needed revenue in its early stages. This should be a separate agreement that provides both parties with market value and is unconnected to the investment agreement. Thirdly, large organisations offer institutional expertise that can assist startups to think about issues relating to their target market because they have been in business for a long time. Client insights obtained on a daily basis may have repercussions for a startup’s product or marketing strategy. Lastly, securing the investment of a strategic partner may encourage others to follow suit, because if a strategic partner understands the industry and the problem and is willing to invest in a company, it must have value.
Malaysian corporate venture capital (CVC) firms invest in emerging enterprises at various stages of development. Each stage has its own set of financial requirements, and corporate venture capital firms in Malaysia usually identify the stage of funding needed as well as the kind of investments they want to make. The stages are early stage fundings, seed capital fundings, expansion financing, initial public offerings and mergers and acquisitions.
The venture capital industry in Malaysia is expanding. In recent years, a host of new venture capital firms have entered the market such as Corporate Accelerator, TuneLab and Hong Leong.
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About NEXEA
NEXEA is a Malaysian Venture Capital and Startup Accelerator firm that specializes in supporting and funding technology companies that have the potential to be the next technology giants. NEXEA also has services for investors and corporations that want to invest or work with future technology giants.
NEXEA is known for its mentors who are successful ex-entrepreneurs, or C-levels who own or have sold (IPO, M&A) their businesses. The combination of experienced mentors, experts, and partners prove potent as the top companies out of 35+ startups invested by NEXEA have grown 3 to 16 times per year. NEXEA is based in Bandar Sunway, Selangor.
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