While investments by traditional, stand-alone venture funds fell by 39%, corporate venture capital spending peaked at $5.7 billion in 340 companies last year, from $361 million in 59 companies in 1995, according to figures from PricewaterhouseCoopers cited by the Wall Street Journal.
Among corporations cutting back on their VC investments are:
- Intel , which invested in Internet sites eToys and Quokka Sports, both of which have folded, in addition to losing money on Digital Entertainment Network.com and NBCi,
- Dell , which backed Digital Entertainment and All.com, which have since failed,
- American International Group’s SunAmerica annuities unit
- AT&T , and
While other companies like Exxon, BellSouth, Digital Equipment Corporation and US West Inc, have closed down their in-house venture capital operations completely.
Some attribute the failure of corporations in the venture capital sphere to their tendency to dive into the market too late. Further, there is often a conflict about whether investments should be made for strategic or financial goals.