The technology industry has always been synonymous with innovation. But technology has now become critical to the success of companies in all industries from banking to automotive to manufacturing. Software and other technologies are critical to the success of these companies to maintain market share and a competitive edge regardless of industry.

Much of this innovation is being developed by startups in Silicon Valley and around the world. Companies are eager to interact with these startups and have developed corporate venture capital groups to make direct investments in startups. Such corporate venture capital groups are tapping directly into the startup economy, ensuring their companies have early access to industry-changing technologies while getting infusions of innovative DNA. More than 800 companies have invested in startups through corporate venture capital program.

These corporate venture capital groups are changing the landscapes for venture capital and startup– with such corporate venture investors being part of syndicates in one-fifth of all venture investment last year.

Against this backdrop, Mark Radcliffe, chair of the Corporate Venture Capital practice at DLA Piper, led a panel discussion entitled "Best Practices in Corporate Venture and Innovation" at the firm's 2016 Global Technology Summit. 

The highlights of the panel are below. The participants were: 

What's driving the rise of corporate venture capital?

Radcliffe: Innovation. The increasing pace of innovation means that corporations need to engage with the startup ecosystem. It used to be that the average Fortune 500 company would spend about 75 years ranked as one of the world's leading companies. Today, the average time spent on the Fortune 500 list is 15 years. It's a fast-changing, competitive business environment. Companies can't rest on their laurels. Companies across all industries have tremendous incentive to get involved in the innovation ecosystem.

Mason: Yes, at the current churn rate, 75 percent of the S&P 500 will be replaced in a little over 10 years. Stagnation can equal extinction. Developing, fostering and investing in innovation is critical.

What types of companies do CVCs invest in? What do they look for in a company?

LeSage Krause: The best companies make the best partners. We invest across the gamut in terms of stages and maturity, but more often in early stages and not quite so much at late stages. At the late stage it would have to be something very strategic, critical. We're often trying to create strategic moments with our investments in companies. We want there to be high potential for impact for both us and them. 

Radcliffe: Companies tend to focus on their strategic areas of interest. They should put these strategies in place before they begin investing and make investments that are consistent with their business objectives. Then, look at timing. Are you trying to find companies with near-, medium- or longer-term potential? 

What can startups expect from corporate venture beyond an investment?

LeSage Krause: In terms of entrepreneurs, they can expect frank, direct conversations from us, particularly in terms of what our expectations are in terms of our role in the company and outcomes.

Dolbec: The most important thing you can expect from us is not money, it is advice, knowledge and direction. As we like to say, GE is a 120-year-old software company. And we are a large company. As such, we can help you determine and test market requirements, learning what features your product needs. That helps a tech startup evolve more quickly. We eliminate a hurdle, an extinction event for startups. It puts them ahead of competitors.

LeSage Krause: We offer protection, insurance, to risks and in terms of access to resources. We are an advisor. We help you learn how to engage with big business, your customers. Larger organizations can sap a startup's time and resources.