NEW BOOK: Will crowdfunding have any impact on corporate venture capital?






By Kevin Berg Grell, PhD.
Co-editor/author of “Crowdfunding: The corporate era” , CrowdfundBeat Sr. Guest Editor,

Corporate crowdfunding

With contributions from 11 industry insiders, my co-editors/authors and I recently published “Crowdfunding: The corporate era,” which provides an early snapshot and analysis of how online financing and in particular crowdfunding has large enterprises.lHcFrdZH

In one of the case studies, we explored how Sony has integrated typical rewards-based crowdfunding for market validation. Product ideas coming out of the company’s seed acceleration program were tested via crowdfunding platforms such as Indiegogo before prototyping. This procedure is integral to the company’s ambition to de-risk product development, and the $28B company has since our book was published taken this strategy one-step further.

Over the summer, Sony announced the launch of “First Fight” – a crowdfunding platform owned by Sony and exclusive to product ideas coming out of the internal seed accelerator program. While this move is a testament to crowdfunding’s applicability beyond fundraising, it begs the question: Is crowdfunding the future of product development for large enterprises? In this context, it’s important to note that corporate venture capital isn’t perceived as negatively in Japan as it is in markets with more traditional venture capital ecosystems.

Click for large Image:

  fu cfce pic2


Corporate venture capital

In a recent Techcrunch analysis, venture capitalist James Riney explores some of the major differences between Japanese and US venture capital. The most important point is the participation of large companies in the startup ecosystem.

In the US, corporate participation is typically between 20-25% of venture capital deals, making corporates the exception rather than the rule especially in early stage ventures. In Japan, the image is the exact opposite.

Participating in the majority of venture-backed deals, Japanese corporates are more common and accepted players in startup finance. In this light, it is not surprising that the first moves are seen in areas where corporate venture capital is already striving. Nor should it come as any surprise that an incubator like 500 Startups spearheads the “corporate moves” in Silicon Valley. The ecosystem is simply geared towards later stage corporate participation when compared to Japan.

Value for corporate venture capital backed B2C deal flow

This could all, however, be about to change!  As CB Insights point out, corporate venture capital has been on a robust path of early stage participation. The checks have been growing and their frequency increased.

Figure 1: PwC-NVCA MoneyTree (TM) Report. Corporate venture capital by sector.

Click for large Image:

fu cfce pic1






So who gets funded? If we look at the MoneyTree™ graph above, it is clear that the overlap between the typical rewards-based crowdfunding and corporate venture capital is rather limited.

When raising money via crowdfunding (disregarding the funding-model), it is clear that the potential crowdfunders must have either a deep knowledge about the particular product/service that will be the bread-and-butter of the company, or the crowd must be able to identify with the need for product/service. For this reason, crowdfunding has resonated with B2C-centric companies and real estate; i.e. very limited overlap with typical corporate venture capital deals.

HOWEVER… crowdfunding might be exactly what US based corporates need to accelerate in B2C deals. As we have pointed out in “Crowdfunding: The corporate Era,” when companies like Sony, IBM, Chrysler, etc.  tap the crowds it is first and foremost a means to collect information, validate ideas, and de-risk their activities. A sentiment that every venture capitalist would applaud.


“Crowdfunding: The corporate era” is published by Elliott & Thompson. Print version available on (Kindle and print) and (Kindle only). Learn more about the book here.

Tags: , , , , , , , , , , , ,


This RSS feed URL is deprecated, please update. New URLs can be found in the footers at [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

Times of IndiaPT Usha takes to crowdfunding to run schoolTimes of IndiaCHENNAI: Legendary athlete PT Usha, called 'Payyoli Express' by her fans, has taken to crowdfunding and raised Rs 20 lakh to train budding girl sprinters and runners at her school in the hope of turning t [...]

Crowdfund InsiderNew Investment Crowdfunding Platform Launches in North Carolina as Full Stack Platform Including Intrastate NC ...Crowdfund InsiderUnder NC PACES, or “North Carolina Providing Access to Capital for Entrepreneurs and Small business Act,” crowdfunding legislation, issue [...]

ChronicleLiveNo need for banks as North East businesses turn to crowdfundingChronicleLiveCrowdfunding has developed a reputation for helping weird and wonderful projects become a reality. But while creative projects have utilised crowdfunding for some time, more and more North East bu [...]

Crowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you cou [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

CFB Finance


  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |