Despite all these merits, Corporate Venture Capital has its problems as well. The most apparent problem with Corporate Venture Capital concerns the culture gap: that between a large corporation and start-ups. While start-ups have typically been fast-moving, tolerance-risk-taking, and innovation-driven, corporations tend to be relatively structured, risk-averse, and, by necessity, process-oriented. All these make cultural gaps bridged quite challenging. It requires even the best communication and collaboration.
Furthermore, alignment of financial returns with strategic goals may not be easy to achieve. Other companies can make either innovation or profitability of investments as priorities that compete against one goal.
Conclusion
Corporate Venture Capital is an extremely strategic tool in creating innovation because the giants venture into tapping the start-ups world. Creating synergy, enhancing the culture of innovation, thus increasing market reach and accelerating R&D activity, CVC brings big companies ahead in the current shifting markets. Of course, there are difficulties, but strategic advantages make the concept of CVC.