Policy, Capital, and the Future of Innovation

Policy, Capital, and the Future of Innovation: NVCA’s Bobby Franklin on Why VCs and CVCs Must Work Together

Corporate Venturing Insider Episode #124 | Interview with Bobby Franklin | Interviewed March 18th, 2026

For the latest episode of Corporate Venturing Insider, Nicolas Sauvage sat down with Bobby Franklin, the CEO of the NVCA,  for a wide-ranging conversation on venture capital policy, the evolution of corporate venture capital, and why the future of innovation depends on stronger collaboration between VCs, CVCs, and policymakers.

History of Venture

Franklin, who has led the National Venture Capital Association since 2013, reflected on how venture capital emerged as a defining force in the American economy. While many might be aware of the deeper historical roots of venture capital through figures like Georges Doriot, Franklin focused on the pivotal policy shifts of the 1970s that accelerated the modern VC industry. He explained that lowering capital gains taxes and allowing pension funds to invest in alternative assets fundamentally changed venture investing in the United States. “Most people look at those two happenings in the seventies as when venture really started to take off,” Franklin said.

Collaboration Between VCs and CVCs

The discussion quickly turned toward the growing role of corporate venture capital. Franklin noted that CVC participation has expanded dramatically over the past decade, now appearing in one out of every six startup funding rounds. According to NVCA data, corporate venture investors participated in 63.4% of total deal value last year, up from 53.6% in 2015.

For Franklin, this growth reflects the increasingly complementary relationship between traditional VCs and corporate investors. “VCs provide agility, CVCs offer the kind of mothership resources for scaling,” he explained. He pointed to Microsoft and OpenAI as a clear example of how strategic corporate involvement can help transform emerging technologies into global platforms.

Nicolas has similarly emphasized that the relationship between VCs and CVCs increasingly resembles a “yin and yang” dynamic within the innovation ecosystem. Both sides rely on one another: VCs provide entrepreneurial speed and risk tolerance, while corporate investors can provide infrastructure, customers, distribution, and long-term strategic support. Franklin agreed, arguing that the industries are “so small as an industry together” that they must align around policies that support startups and innovation.

Role of Policy in Venture

Much of the conversation centered on policy and the increasingly difficult exit environment facing venture-backed companies. Franklin argued that weak IPO markets and restrictive M&A policies have directly contributed to today’s fundraising slowdown. “The lack of distributions is a direct result of lack of exits,” he said. When asked what single policy change he would prioritize with a “magic wand,” Franklin pointed to mergers and acquisitions. He noted that only 5% of successful venture-backed companies ultimately go public, while far more achieve successful outcomes through acquisitions.

The pair also discussed the growing overlap between traditional VCs, CVCs, LPs, hedge funds, and other nontraditional investors. Nicolas highlighted the importance of training and professional standards as the industry evolves, especially as corporate venture investing scales globally. Franklin described NVCA’s growing educational initiatives through Venture Forward and VC University, which now partners with both Stanford Law School and UC Berkeley School of Law.

Looking Ahead at AI

Toward the end of the conversation, the discussion broadened into AI, national competitiveness, and innovation policy. Franklin warned that fragmented state-by-state AI regulation could slow American leadership in artificial intelligence, particularly as global competition intensifies. Nicolas connected the issue to his recent discussions with European leaders on venture capital and innovation ecosystems, noting that countries increasingly recognize venture-backed innovation as critical to economic and geopolitical strength, but their risk appetites differ.

Ultimately, both leaders returned to the same conclusion: policy matters. “Everywhere you look, there’s a need for innovation,” Franklin said. “And every corner you look, there’s a way that public policy can help or hurt.”

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