What is the main goal of corporate venture capital investments?

• A. To comply with government regulations on investment quotas
• B. To maximize short-term profits through frequent trading of securities
• C. To gain strategic benefits and foster innovation aligned with the corporation's objectives
• D. To provide loans to startups at high interest rates

Answer: (C)

Verified step by step guidance

1. Understand the concept of corporate venture capital (CVC): Corporate venture capital refers to investments made by established corporations into startup companies, typically in the form of equity stakes, with the goal of achieving strategic benefits rather than purely financial returns.
2. Identify the primary goal of CVC investments: The main objective is to gain strategic benefits, such as fostering innovation, accessing new technologies, and aligning with the corporation's long-term objectives, rather than focusing solely on short-term profits or compliance with regulations.
3. Eliminate incorrect options: Analyze the provided options and rule out those that do not align with the strategic nature of CVC. For example, 'To comply with government regulations on investment quotas' and 'To maximize short-term profits through frequent trading of securities' are not aligned with the strategic goals of CVC.
4. Focus on fostering innovation: Recognize that CVC investments often aim to support startups that can drive innovation and complement the corporation's existing business model or future growth plans.
5. Select the correct answer: Based on the analysis, the correct answer is 'To gain strategic benefits and foster innovation aligned with the corporation's objectives,' as this aligns with the primary purpose of corporate venture capital investments.