It’s a rough climate for founders looking to raise money, which will shape how brands navigate funding and ultimately inform exit strategies. For at least a decade, many beauty conglomerates have established investment arms—corporate venture funds—to invest in external start-ups to gain strategic advantages, access to innovation, explore new markets or business models, and gain an advantage in a potential acquisition. Beauty conglomerates have become a reliable early-stage funding source, but there are some things to consider when contemplating corporate venture capital (CVC). Potential Acquirers and Reduced Exit Optionality: An investment by CVCs may serve as a “foot in the door” for a future acquisition by the parent company; however, it can also limit the pool of potential acquirers, limiting competitive tension in an M&A process and possibly affecting valuation. Some CVCs may also require rights of first refusal or approval on exit events, further constraining options.Potential for Higher Valuation: CVCs can bring operational synergies, distribution access, and credibility, potentially boosting a brand’s valuation at exit. Their industry expertise and resources may help the brand scale more efficiently, making it more attractive to acquirers or public markets.Exit Timing and Flexibility: CVCs may have longer investment horizons than traditional VCs, as their goals often include strategic fit and innovation rather than quick financial returns.