If not all corporate venture efforts are financially rewarding, how else might they be evaluated?

Question

What will be an ideal response?

Answer 1

Not all corporate venturing efforts are financially rewarding. In terms of financial performance, slightly more than 50 percent of corporate venturing efforts reach profitability (measured by ROI) within six years of their launch. If this were the only criterion for success, it would seem to be a rather poor return. On the one hand, these results should be expected because corporate entrepreneurship (CE) is riskier than other investments such as expanding ongoing operations. On the other hand, corporations expect a higher return from corporate venturing projects than from normal operations. Thus, in terms of the risk to return trade-off, it seems that CE often falls short of expectations. There are several other important criteria, however, for judging the success of a corporate venture initiative. Most CE programs have strategic goals. The strategic reasons for undertaking a corporate venture include strengthening competitive position, entering into new markets, expanding capabilities by learning and acquiring new knowledge, and building the corporation base of resources and experience.