Corporate Venture Capital: Structuring Concerns for Investors and Startups

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Corporate Venture Capital: Structuring Concerns for Investors and Startups will provide commercial finance and private equity counsel with a review of corporate venture capital (CVC) investments in startups. The panel will discuss the differing objectives of corporate vs. pure venture capital investors and how those objectives are reflected in deal points like management control, sharing of information and technology, and exit strategies. Rimon Partner Dror Futter will be speaking at the program.

Program Description

VC has seen unprecedented growth in recent years, with strategic venture investors looking at early-stage companies more than ever before. Direct investment (as opposed to a joint venture or cooperation agreement) gives the corporate investor greater involvement and offers the most significant financial upside. CVC provides a valuable source of financing for technology-focused startups while providing the investor with a new avenue for innovation in its own business.

The fundamental rights and duties of the investor are usually summarized in a term sheet or letter of intent. When dealing with strategically motivated investors, the founders should insist on strict confidentiality undertakings by the company regarding information received in the due diligence process and a non-solicitation obligation of the corporation regarding the startup’s employees. CVC financings generally utilize versions of the commonly used NVCA model documents. However, the specific needs and concerns of a CVC typically will be addressed in one of the investment documents or by side letters. This panel will highlight CVC-unique provisions. Listen as our authoritative panel examines the aspects of CVC that distinguish it from traditional venture capital investment and issues which investors and startups should consider before entering into a CVC transaction.

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Dror Futter focuses his practice on startup companies and their investors, and has worked with a wide range of technology companies. His fifteen years’ experience as in-house counsel includes positions with Vidyo, Inc., a venture-backed videoconferencing company, and New Venture Partners, a venture fund focused on corporate spinouts. Prior to that, Mr. Futter was Counsel to the CIO of Lucent Technologies, as well as supporting parts of its sourcing organization.