We add to the literature on corporate venture capital (CVC) by examining the effect of corporate parent heterogeneity on CVC activity, and specifically on the “paradox” of CVC, whereby startups avoid investment from corporate partners in the same industry. We draw on social capital theory to develop a model of corporate parent characteristics representing either potential benefits (i.e., social capital) or risks (i.e., social liability) to startups, which impact the likelihood of CVC investment. We argue that startups balance these risks and benefits when seeking a corporate partner, suggesting an interplay between social capital and liability as an underlying determinant of the strength of the paradox of CVC.