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“If you look at the large Fortune 500 companies 50 years ago, many of them no longer exist,” says Ilya Strebulaev, a professor of finance at Stanford Graduate School of Business and Professor Wang. “The big reason why was their failure to innovate.” It’s only in the last decade that corporate venture capital (CVC) has gained traction as a way to remain relevant and stay ahead of competitors. In 2020, CVC arms invested more than $70 billion in startups, accounting for a 1/4 of all VC deals. . The way these CVC arms are organized, "is not very efficient". The interviewees mentioned corporate and financial constraints as well as a general lack of knowledge about VC among corporate leadership. More than 60% of the senior execs Strebulaev and Wang spoke with confided that their parent companies do not understand the norms of venture capital. Most CVC units use a 2-tier decision-making process, often requiring near-unanimous approval from a committee outside the team. Traditional VC firms, also secretive, typically follow a well-worn playbook for structuring leadership and decision-making processes for their investments. CVC, do not, nor are they straightforward. Strebulaev says many of the barriers faced by corporate VCs likely stem from complicated objectives, corporate culture, and the relative newness of corporate venture capital. He says that often corporations trying to get in on the action have launched their CVC arms in an ad hoc fashion. Instead, he advises, they should carefully design these units to be as efficient as possible from the start. When corporations are planning to launch a CVC unit, making a serious commitment to a long-term investment is critical. “If you design corporate venture capital units imperfectly,” Strebulaev says, “then you will not get as many results. Or maybe you will not get any results.”