A current concern for the UK venture capital industry involves the long-term availability of funds for investment. To date the corporate sector is a relatively under-utilized source of finance for UK funds, particularly in comparison with the USA. Based on a survey of 39 venture capital fund managers in the UK, this paper examines the significance of corporate sources of finance for venture capital funds, and identifies the investment characteristics of these funds. The potential advantages and disadvantages of corporate venture capital (CVC) for venture capitalists, corporate investors and small investee firms are Considered along with possible future trends and the scope for development of the activity in the UK. The study finds that on account of both an unwillingness on the part of corporates to invest and a venture capital community that has largely been discouraged by previous experiences to seek finance from the corporate sector, CVC is still underdeveloped in the UK. However, a large majority of venture capitalists support its encouragement and highlight important roles for venture capitalists, large and small companies, and policy makers in increasing its significance.