It’s impossible for corporations to be competitive without collaborating with startups.
There’s a simple reason; innovation happens at such rate and volume that’s it’s very hard to keep up only with internal R&D activities. It’s compulsory for established companies to keep an eye on what’s happening outside the firm and define means to collaborate with innovative startups. It can be through pilots, co-developing a technology, on a client-provider basis, or though capital investment.
We call this process “corporate venturing” and it’s already on the agenda of all major corporations.
Here 4 ways for corporations to develop corporate venturing activities and innovate through startups:
1. Open Challenges
Challenges are open calls asking startups that fulfill certain criteria to apply. Selected ventures might receive operational support or access to further phases at the corporate’s program. The goal of challenges is to identify early on new technologies and industry trends.
2. Corporate Accelerators
Structured programs that include curricular sessions, mentoring, expert matching & working space. It ends with a demo day showcasing the startup’s evolution through the program. The goal is to evaluate potential synergies thanks to a long(er) relationship provided by the program.
3. Venture Client
Provably the most hands-on approach of all. A commercial collaboration between the corporation and the startup where the startup becomes a supplier. The goal is to identify innovative technologies and product providers that help make the company more competitive.
4. Corporate Venture Capital (CVC)
CVCs are investment funds set by the corporation. The mechanics are the same ones of a venture capital firm. Here, 100% of the capital is provided by the corporation which avoids regulatory issues related to managing capital from 3rd parties. The goal is to invest in startups in return for equity.
The world is moving fast, and the only way for stablished companies to keep up with such speed is to establish a system that identifies and defines ways to collaborate with innovative startups.
