Family businesses drive innovation through corporate venture capital
Are family firms capable of being innovative? Two recent studies by Mario Daniele Amore and several colleagues explore the issue from two complementary perspectives: the innovativeness of family firms depending on the characteristics of the CEO, and innovation driven by family venture capital activity. Today, we look at the latter of these topics.
Large family-controlled firms are emerging as key players in startup financing. A new study by Mario Daniele Amore, Samuele Murtinu, and Valerio Pelucco shows that in the United States, nearly one-third of all corporate venture capital (CVC) investments—that is, investments in startups made by established companies—come from family-controlled firms.
Not only are these family businesses actively investing in new ventures, but they also do so more effectively: they tend to co-invest with high-profile partners, focus on startups in their own industry and region, and on average achieve better outcomes in terms of successful exits.
It is true that the share of CVC from family firms roughly corresponds to their share among medium-to-large American companies. However, the prevailing view before this study was that family firms were relatively inactive in this space. Instead, the research shows that family businesses are an important engine of corporate venture capital and are better able to translate their investments into IPOs, acquisitions, or other positive outcomes than their non-family counterparts.
The context
Corporate venture capital refers to the practice of established companies investing capital in emerging startups, often through dedicated funds or operational units. Over the past two decades, this form of investment has grown significantly: in 2019, CVC investments were estimated to account for about 15% of all venture capital in the United States.
Unlike independent venture capital funds, which are focused on quick financial returns, CVC initiatives also aim to create strategic synergies between the large company and the startups they fund. For example, an industrial firm might back a promising tech startup to integrate its innovations into its own products.
Despite the growing relevance of CVC, the specific role of family-controlled firms in this area has remained largely unexplored.
Family businesses are widespread around the world and often display different management styles and goals compared to public corporations. It is therefore reasonable to expect them to take a different approach to CVC as well, but scholarly literature had not yet addressed this issue directly.
The research
The study by Amore, Murtinu, and Pelucco examined all corporate venture capital deals in the United States from 2000 to 2017. Over this period, the authors recorded 8,286 CVC transactions, identifying in each case whether the corporate investor was a family-controlled firm.
Family presence in CVC turns out to be far from marginal: 2,382 of the deals, or about 29% of the total, involved a family-controlled corporate investor. In terms of capital, family firms took part in investments totaling roughly $12 billion, compared to $20.9 billion invested by non-family firms in the same sample.
Conclusions and takeaways
Beyond quantifying the phenomenon, the study investigates how family firms invest in startups and what results they achieve. The evidence points to significant differences in strategy compared to other firms. First, family firms are much more likely to invest in syndicates, that is, in partnership with other investors. They not only take part in funding rounds with a greater number of co-investors, but also choose investment partners with stronger reputations. This collaborative approach helps mitigate risk by providing a kind of “second opinion” on the target startups and bringing in complementary expertise for evaluating and monitoring projects.
At the same time, family firms tend to prefer startups that operate in their core industry and are geographically close. Investing in familiar fields reduces information asymmetries and makes it easier to monitor the project's progress, confirming that these firms adopt a cautious and targeted approach to venture capital.
These behaviors are especially pronounced when the CEO is a family member. Conversely, in family firms led by an external manager, CVC strategies tend to resemble those of non-family companies.
These strategic choices lead to tangible outcomes. Family-led corporate venture capital delivers better performance: the startups they fund are more likely to reach a successful exit, such as an IPO or a profitable acquisition.
In short, family businesses are capable of driving innovation even through sophisticated tools like CVC. While still relatively rare among Italian family firms, with some notable exceptions, this type of activity represents a significant challenge worth taking on.
Amore, M.D., Murtinu, S., & Pelucco, V. (2025). “Family firms in entrepreneurial finance: The case of corporate venture capital.” Journal of Banking and Finance, 172, 107391. DOI: https://doi.org/10.1016/j.jbankfin.2025.107391.
Read the other article in the series:
Amore - New generations are a powerful driver of innovation in family firms. Here’s why
