As valuable as quantitative analysis can be, it cannot tell companies how to do venture investing well. That knowledge is the product of experience, which The Boston Consulting Group has gained from extensive participation in designing and establishing CVC units in a variety of industries. On the basis of that experience, we have identified a set of best practices intended to help companies realize the full potential of venture investing while sidestepping the possible pitfalls. These practices can benefit companies preparing to enter the venture capital arena for the first time as well as those seeking to improve their existing operations.
We find that the most successful CVC units follow a set of distinct and well-defined ground rules. (See Exhibit 5.) Those ground rules dictate how those units define both their operating principles and their strategy, how knowledge is captured and transferred, how corporate assets are leveraged, and how venturing teams are staffed.