Large industrial corporations (parent companies) leverage corporate venture capital (CVC) to invest in start-ups, aiming to access cutting-edge knowledge and foster innovation. However, asymmetrical power dynamics often lead start-ups to engage in defensive behaviors like knowledge hiding in response to parent companies’ knowledge search intentions, creating knowledge acquisition challenges and limiting CVC’s innovation potential. How to optimize CVC layout and governance, so as to enhance parent companies’ innovation capacity? Based on the data of CVC activities of Shanghai and Shenzhen A-share listed companies from 2005 to 2020, this paper examines the impact of investment portfolio strategies and governance modes on parent companies’ innovation inputs. The results show that industrial and geographic diversification in CVC portfolios boosts parent companies’ innovation more effectively than centralized strategies. However, parent companies’ centralized decision-making and heavy-handed control will heighten start-ups’ perceptions of knowledge appropriation and weaken the innovation benefits of diversification. Further analysis shows that diversified CVC portfolios particularly enhance parent companies’ innovation efforts in knowledge-intensive sectors or when investing in defensive start-ups. By unpacking the “knowledge search–knowledge hiding” interaction in CVC, this paper deepens the micro mechanism research on the impact of external knowledge exploration on innovation, offering theoretical and practical insights for parent companies to drive innovation through venture capital.