Although this approach carries high risk, internalising this way of thinking enables a corporate to respond to disruptive industry developments or, one step further, become an industry disruptor itself.Īlthough uncommon, some corporate ventures invest in startups for financial gain. This way of thinking and doing business nourishes innovativeness. Leveraging the innovative minds of a startup, corporates can continue to focus on their current operations, while the startups are tasked with exploring the ‘next big thing’ in the market. Transforming is when a corporate uses corporate venturing to adapt or even pivot its business model. While this approach carries low to medium risk, it will not lead to disruptive innovation. If learning and adapting is the main goal of a corporate venture, there is often a close link with current operations and the acquired resources and capabilities build on the current business model. Learning organisations grow their capabilities along the dimensions of what they already do. Strategic innovation objectives are most often focused on learning and/or transforming. In return, the start-up receives strategic advice and funding to accelerate its own growth.Ĭorporate venturing can have both financial and strategic innovation objectives. The approach is most often used to quickly and impactful invest in complementary technology or capabilities that solve specific problems and help a corporate with accelerating its innovation. Tim Vellema, a Consultant at The Next Organization, outlines the benefits and risks that come with corporate venturing.Ĭorporate venturing is the concept of larger companies either developing, sponsoring, or investing in startup companies, such as taking minority equity stakes or providing growth funding. With disruption triggering the need for faster and more innovation, a growing number of companies are turning to corporate venturing as a means to fuel their innovation agenda.
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