Apple Computer - Strategic Investment Group

SUBJECT AREAS: venture capital, corporate venturing, strategic investment, conflict of interestCASE SETTING: Apple Computers, 1984-1989, computer industry.This case looks at how a corporation may engage in venture capital. It discusses the particular approach that Apple Computers took when designing its internal venture capital division. In order to avoid the pitfalls that early corporate venture capitalists had encountered, most of them relating to conflict of interest between the venture capitalists and the entrepreneurs, Apple Computer made a number of commitments not to interfere in the strategic issues of their portfolio companies. While many of the early corporate venture capital funds had been unsuccessful in generating financial returns, Apple Computer generated significant financial returns on their venture capital operation. Because of the commitments, however, there were no significant strategic returns to the program. This eventually lead to the demise of the venture capital division