Corporate venturing or corporate entrepreneurship is about setting up new businesses within a firm. The ventures start off as a result of ideas arising within, and opportunities recognized by the organization, and are referred to as internal corporate ventures, as opposed to external ventures. If the internal venture grows well, it is given more structural and strategic support, and may be eventually spun off and given more autonomy.
External corporate ventures on the other hand are independent, usually small firms or start-ups. The organization may be interested in the external venture for strategic reasons and help in co-creation or investing or mentoring the external venture, and may eventually acquire it. The advantages in acquiring this relationship are manifold: while the external start-up venture gets the much needed capital, resources, and reputational strength, the larger organization acquires or gets access to: a young, ambitious agile team; new technologies and processes; and a fresh set of new opportunities.
While this should save time, and build value on both sides, a recent article in the Economic Times criticizes the investment strategy of some big IT firms. It finds that investments are far removed from the core competencies of the company, and as such may not add to a competitive advantage. Also that such an investment may hinder the growth of the startup by putting an unnecessary constraint imposed due to having received the munificence of one party, and being disallowed relationships with others more in its line of business.
(http://articles.economictimes.indiatimes.com/2015-07-02/news/64039265_1_venture-capital-axeda-early-stage-startups)