By contributing to economic growth and creating jobs, small businesses play an important, perhaps, increasingly important, role in the global economy. Moreover, as the cradle for novel technologies and business models, small companies serve as the engine of the innovation process.

Yet, establishing a small business carries a heavy load of uncertainty: only half of new companies survive through their first five years; the attrition rate for high-tech startups exploring new, riskier technologies is even higher. Every measure that could help small companies succeed will therefore have a profound positive effect on the world’s economy in general.

Obviously, governments should take a lead in supporting small businesses; however, big corporations too can assume some responsibility in looking after their little brothers. Getting access to corporate resources, through establishing “big-small” collaborations, will allow small companies rapidly scale their businesses and acquire new customers, increasing their chances to succeed. This brotherly love doesn’t have to be completely altruistic, though. For large companies, working with nimble, inherently entrepreneurial startups can help rejuvenate and speed up corporate innovation programs.

The collaboration between large and small companies may take different forms, and one in particular, corporate venture capital funds (CVC), is rapidly gaining traction. According to a research firm CB Insight, in 2014, there was a 28% growth over 2013 in corporate VC groups making their first investment in startups; the number of existing CVC funds was expected to double in 2015. In fact, one-fifth of all venture deals in Q3 2015 included CVC participation.

Moreover, from the startups point of view, corporate money has turned out to be a particularly successful investment. As described in-depth in a 2013 Harvard Business Review article, over the period of 1980-2004, startups that had gone public after being funded by at least one corporate VC investor outperformed those funded exclusively by traditional VCs (as measured by average annual revenue growth, increase in ROA and stock price performance).

Why is that? The explanation seems to lie in the objectives that the corporate and traditional VCs pursue when investing in startups. While traditional VCs invest capital with the sole objective of financial returns, CVCs often invest for primarily strategic reasons, with financial return being only a secondary consideration. In fact, in a CB Insight survey, 4 out of 5 CVCs named strategic value of working with startups as a key decision driver. Moreover, the vast majority of CVCs actively work with their portfolio companies providing them with domain expertise and access to their proprietary networks. One could argue that the industry-specific expertise delivered by corporate teams would be much more valuable to startups that the one drawn from the “generalists” employed by traditional VCs.

Image credit: Ralph Earle (1751-1801), “Portrait of Two Brothers”