The plain facts about strategic investments bubbled to the surface at Invest Atlantic on Tuesday during a no-sugar-coating discussion on whether strategic or venture capital investments are better.

It’s difficult to write a conclusion on the panel discussion titled Corporate vs. Venture Capital Investment. Its strength was that there were so many views, often opposing views, presented clearly by people with tremendous experience in the field.

The speakers revealed that a good corporate partner/strategic investor can bring a huge wealth of experience and contacts to a startup, not to mention badly needed capital. But they also revealed that large corporations have their own agendas when they invest in small companies, and startup founders have ensure that they know what that agenda is. They also should know that corporates hope one day to make a return on their money.

“The main reason we do strategic investments is we want to get a strategic benefit,” said Kevin Woods, Senior Manager of Corporate Investments at Lockheed Martin. “But I am not a loss-leader … I have to have a return on the investment.”

Saying he sometimes wears a white hat and other time a black hat, Woods was frank in admitting that he often looks for beneficial licensing agreements when he negotiates a strategic investment. But he also said that working with the world’s largest defence contractor has huge benefits for the target company.

One panel member who agreed that there are huge benefits was George Palikaras, Founder and CEO at Metamaterial Technologies. The Halifax startup struck a partnership this year with Airbus, the world’s largest airplane manufacturer.

He said a strategic deal like that means “your team just expanded by how many thousands of employees.” He added a properly structured deal that gives the startup founder access to key decision makers at the large company and should allow the small company to steer its way through the corporate bureaucracy.

Yet startup veteran Steve Nicolle, the CEO of Halifax-based STI Technologies, highlighted the dangers of strategic deals. Working for startups in the U.S., he had done deals with networking giant Cisco and top-flight venture capital firm Kleiner Perkins Caufield & Byers.

“As an entrepreneur, my worry is you’re trying to buy my company without buying my company,” he told Woods. “I’m going into it [a negotiation] with my radar on.”

Nicolle added two problems that can occur when a startup has a strategic investor. First, having one multinational as an investor could scare off other multinationals as potential acquirers. And second, just because a large company’s corporate team makes an investment, it doesn’t guarantee that the product team is going to pay attention to the startup.

Woods jumped into the conversation again to say that what a lot of startups don’t realize is that venture capital firms don’t always bring the expertise and connections that they promise.

“Strategic guidance? They think about it but that’s about it,” said Woods. “I think a guy who’s sitting on 15 boards is going to give you about three hours a week. It’s impossible to give more.”

Once again, Nicolle responded that his former company got “astounding” value from Kleiner Perkins, which made great introductions.