Strategic Power Play: How CVCs Are Redefining the Venture Capital Game

BCR Seed Starter, Romania’s first Corporate Venture Capital (CVC) firm launched by a bank, has become a driving force for startups seeking more than just funding. Adrian Roșoagă, Chief Investment Officer of BCR Seed Starter, sheds light on the unique advantages of CVCs and their role in shaping the future of venture capital. With over 100 conversations with tech founders since its inception, the BCR Seed Starter team has gained valuable insights into the startup ecosystem and what sets CVCs apart from traditional venture capital firms.

In this exclusive interview, Adrian Roșoagă dives into the pivotal differences between CVC and VC approaches, emphasizing the strategic value that comes with partnering with a CVC. For founders, this partnership isn’t just about securing capital but leveraging the corporate parent’s resources, credibility, and extensive networks to achieve long-term growth. Roșoagă also highlights BCR Seed Starter’s mission: empowering entrepreneurs to transform from local disruptors to global players.

Why should a startup choose a CVC over a traditional VC? What are the key benefits in terms of strategic goals, corporate resources, and long-term growth? Adrian Roșoagă answers these questions while sharing how BCR Seed Starter actively supports founders in their journey to scale internationally and drive meaningful innovation in digitalization, ESG, and beyond.

Why apply to a CVC?

STRATEGIC GOALS, NOT JUST CAPITAL. 

Unlike VCs, which are primarily focused on financial returns, CVCs seek to achieve certain objectives that are aligned with their parent company’s strategy, corporate culture, and values. In our case, at BCR Seed Starter, our investments aim to be the steppingstones in building long-term partnerships. We are here to bring serious value to the bank and help our clients level up. Moreover, our investment thesis does not only refer to fintechs. If your product is shaking up digitalization, automating workflows, boosting business transformation, powering data-driven insights, or pushing ESG innovation, BCR Seed Starter can open doors to BCR’s and Erste Group extensive ecosystem and client universe. And this is a strategic advantage that traditional VCs might not be able to provide. 

 

So keep in mind that, when talking to a CVC, you’re not just pitching for money, but you’re proposing innovation and strategic collaboration that can create mutual value for both your company, the CVC’s corporate group, and their clients.

LEVERAGE CORPORATE RESOURCES. 

Beyond money, CVCs offer something invaluable: access to corporate resources. A CVC-backed start-up may gain entry to the CVC parent company’s infrastructure, R&D capabilities, and market channels. 

I’m going to use here the example of BCR Seed Starter, as we’re all about turbo-charging the scale-up journey for the startups we back. How do we pull this off? First, we plug them straight into our George digital ecosystem. We give them access to our banking app through George marketplace, unlocking instant visibility to 2.4 million retail users and more than 160,000 companies using George for business. On top of that, we hook them up with prime networking opportunities through dedicated events, and we make high-value intros to the enterprises that matter most for their growth. Simply put, this is part of our vision of fast-track development, and this is what we put into action. 

LONG-TERM FOCUS, NOT GROWTH HACKS. 

If your goal is to build a sustainable, long-term-oriented business that stands the test of time rather than a quick win, a CVC is the right fit. CVCs are typically less concerned with short-term returns and more focused on long-term strategic value. This allows you to work on building a sustainable product without the pressure to rapidly scale. At BCR Seed Starter, it is not about reaching the extremely high growth rates that are sought by the typical VCs, but about finding robust business models with excellent client feedback, in high enough underserved markets that show the potential to expand beyond Romania and/or the CEE region. And we are here to specifically support this international expansion. 

MENTORSHIP AND EXPOSURE TO MARKET EXPERTISE. 

Many start-ups fail because they lack industry-specific knowledge or the right mentorship. CVCs bring industry expertise to the table, which can be instrumental in shaping your product and scaling it effectively. 

In our own example, at BCR Seed Starter, we are focusing on tailored mentoring from our bank’s experts on various topics, from banking products/services, marketing, and communication to data privacy, cybersecurity, and investment banking. This type of tailored advice, and exposure to the best practices of the corporate world gives our investments a competitive edge, helping them make the difference in more complex tenders of prospects and existing clients. 

CORPORATE ENDORSEMENT AND CREDIBILITY. 

When a well-established corporation invests in your start-up through its CVC, this endorsement can significantly boost your credibility in the market. Clients, partners, and other investors are likely to take notice. Just imagine that securing an investment from BCR Seed Starter raises your start-up’s profile, both locally and internationally. With BCR’s credibility backing your venture, you can attract more investors, partners, and clients. Moreover, it gives you access to the broader Erste Group network, including potential partnerships with Seed Starter programs in the Czech Republic and Slovakia, expanding your market reach beyond Romania.

That said, applying for CVC funding can be a defining moment for your start-up. The timing of your submission should coincide with a readiness to scale and a clear value proposition for the CVC’s parent company. A well-crafted pitch should demonstrate how your start-up can leverage the corporate parent’s resources, mentorship, and client network to create long-term, sustainable growth.

Closing this material, I was thinking if I should reveal one of our main ingredients, at BCR Seed Starter. I decided to do so, as we are looking for startups that can put some of this in their dough. Our keenness to create prosperity and long-term value. This is what we are made of, and this is what we are looking for. So, if you’re part of a tech start-up and are ready to discuss how your solutions can drive innovation in the banking industry, Romania and even on a global scale, we’d love to hear from you… and also to see you at How to Web Conference 2024!

Don’t be a stranger and let’s explore how we can work together to shape the future of financial services and a better prospect of the Romanian economy.

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BCR Seed Starter continues its mission to empower tech startups at Venture in Eastern Europe, How to Web’s exclusive investor pre-event. With a strong focus on propelling startups to global success, BCR Seed Starter is uniquely positioned to offer founders the strategic collaboration they need to drive innovation and expand their reach across the region and beyond.