Strategizing Corporate LP Positions

Abstract

Strategically motivated corporate venture capital (CVC) units increasingly operate through limited partnership (LP) positions in venture capital (VC) funds, yet the CVC literature concentrates almost exclusively on direct investments, leaving this indirect investment mode theoretically under-explored. This thesis addresses the gap through an exploratory study of the strategic rationale, governance, and measurement of strategic value that corporate LP positions generate. The study draws on 35 semi-structured interviews across four respondent groups, analyzed using an adapted Gioia methodology. Four strategic rationales for LP positions are identified, each of which reflects a distinct VC advantage the corporation cannot match internally at equivalent cost or speed. Governance operates across two levels. At the GP-LP interface, contractual mechanisms establish the baseline, while relational mechanisms unlock value realization, sustained by mutual value creation. At the internal corporate level, absorptive capacity determines how much value the organization captures, shaped by how information flows between the VC fund, the CVC unit, and the parent company. Measurement follows a two-tiered framework: activity-based metrics track engagement quality as leading indicators, while outcome-based metrics carry greater weight but are harder to attribute to the position itself. The thesis advances the CVC literature by establishing that LP positions function differently from direct investments and demand tailored approaches to rationale, governance, and measurement. The findings are translated into three practitioner instruments: a classification matrix that converts the rationales into fund-selection criteria, governance guidelines specifying design choices and organizational structure, and a practical measurement framework for demonstrating strategic value to parent companies. Together, these instruments enable CVC units to manage LP positions as a deliberate component of their broader CVC strategy