Investment in entrepreneurial ventures has gained recent popularity as a means for established firms to learn about new technologies and markets. However, the link between such corporate venture capital (CVC) investments and innovation outcomes has not been examined in detail. Using panel data from corporate investors in telecommunications equipment manufacturing, we investigated the conditions under which CVC investments affect knowledge creation for corporate investors. We found that, when investor involvement is low, number of CVC investments has an inverted U-shaped relationship with innovation performance. However, when investor involvement is high, the relationship reverses, and an increase in investments boosts innovation.