NATIONAL BANK OF CANADA
plays a pivotal role in driving economic development and technological advancement nationwide .
Venture Capital vs . Corporate Venture Capital VC and CVC differ significantly in their objectives , investment approaches , sources of funds , and strategic goals . Traditional venture capital firms primarily aim to achieve high financial returns within a relatively short period . Their focus is on identifying and investing in high-growth startups with the potential for substantial financial returns upon exit , whether through an acquisition or an initial public offering ( IPO ). These firms operate through general and limited partnerships , where investors , known as limited partners , provide the capital , and the venture capitalists , or general partners , manage the investments .
Philippe elaborates , “ Their goal is really to exit the company in five to seven years .” This shorter-term vision is characteristic of traditional VC , driven by the imperative to realise financial gains swiftly .
In contrast , CVC is driven by both financial and strategic objectives . While CVC units seek financial returns , their investments are also closely aligned with the strategic goals of the parent corporation . This dual focus means that the need for quick financial gains does not solely drive CVCs ; instead , they prioritise long-term strategic benefits such as fostering innovation within the corporation , gaining access to new technologies , and entering new markets . The funds for CVC investments come
“ NAventures is about internal enhancement and strategic alignment , aiming for a sustainable , long-term impact on the bank ’ s overall performance and competitiveness ”
PHILIPPE DAOUST VICE PRESIDENT & MANAGING DIRECTOR , NATIONAL BANK OF CANADA
from the corporation itself , eliminating the need to raise capital from external investors .
Additionally , the investment horizon for CVCs is often longer compared to traditional VCs . This longer-term vision allows CVCs to be more patient and flexible with their investments , aligning them with the corporation ’ s broader strategic plans . Unlike traditional VCs , which may exit their investments as soon as financial targets are met , CVCs are more likely to maintain investments that continue to provide strategic value to the parent company .
National Bank of Canada ’ s venture initiatives National Bank of Canada leverages two distinct corporate venture initiatives , NAventures and external ventures like Portage , each tailored to fulfil different strategic needs and purposes within the organisation .
6 nbc . ca