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What is Corporate Venturing and why would you care?

Sander van der Blonk

· Corporate Venturing,Collaboration,Growth,CVC

Regularly, company leaders ask me to define the term Corporate Venturing as it progressively is seen as a potent way of adjacent and radical innovation.

Although there are many nuances my response, in short, is as follows:

  • On the one hand, corporates can innovate themselves. E.g., through R&D, and through cross-functional product innovation teams or so-called Corporate Startups.
  • On the other hand, corporates can buy innovation using Corporate Venture Capital (CVC) for stakes or startup takeovers.

Corporate Venturing is the middle ground, between doing-it-yourself and buying. I define it as Collaborative Innovation whereby corporates and startups jointly develop transformative ideas and solutions in which both sides take a risk and share in the rewards.

The fundamental logic behind the surge of Corporate Venturing is compelling: Corporate innovation capabilities quickly become obsolete now that technology and industry boundaries change faster than organizations can absorb.

Also, corporates cannot innovate like startups, for all the obvious (company polireasons. Moreover -contingent on sector and company maturity there is rising frustration as financial investments in startups generate minimal to no return.

Collaboration with startups provides the new muscle. It can be both exciting and delivers significant strategic and financial benefits provided it is done right.

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