As an alternative to M&A, companies are making more and more minority investments in start-ups by way of corporate venture capital (CVC).
CVC now accounts for about a quarter of all venture capital (VC) investing according to various industry sources.
But, not all companies have the means to set up investment funds. What's more, CVC requires a high risk tolerance.
For these and other reasons, companies increasingly look for non-equity-based partnerships with start-ups. And so, from food to finance, the interest in working with early and later-stage start-ups through vendor relations and joint-innovation projects is soaring.
For some companies, working with start-ups is a one-off annual event in the form of a challenge prize. Especially for those companies who are wrapped up in doing business as usual.
But the overarching trend is that companies seek start-ups to support their agile go-to-market strategies. And create the option to transform faster considering today's unstable business conditions.
Most companies are pretty passive in finding suitable start-ups
Nevertheless, we have seen that most companies are pretty passive in their approach to finding suitable start-ups. They might like a start-up that approaches them and then somehow find a way to work together.
The odds of finding the best-fit from a handful of start-ups are slim. And we learned that it must become easier for companies to systematically and repeatedly source start-ups and assess the benefits and risks of working together.
That's why we built Scoutely as a full-cycle, shared due diligence platform to make collaboration evaluation quicker and easier for all sides: The company's stakeholders and project leaders, and the start-up team alike.
By lowering the barriers to start-up opportunity assessment, companies can significantly reduce the time needed for internal coordination. And de-risk start-ups better and faster.
Plus, they can do it themselves instead of outsourcing the matching to external advisors saving much money.
Any questions? We'd love to show you how you can make more impact using Scoutely.