CORPORATE VENTURES NEED THE RIGHT TALENT AND FUNDING STRATEGY

Corporate venture building is becoming increasingly important as part of corporate growth strategies, to build up the next level asset class, and to diversify the corporate innovation portfolio across all horizon levels, especially towards adjacent and radical innovation. According to a recent McKinsey study, eight in ten surveyed CEOs see new-business building as a top-five priority in the next few years despite the current challenging economic situation. During their early stage, corporate ventures are usually well-funded and accelerate fast, utilizing knowledge and assets of the core organization and growing in a venture-studio environment. However, after the first incubation phase, the process of roll-out and scaling usually leads to higher investments and risks which yet only few corporates are prepared to take.

When it comes to exploring novel business opportunities, intrapreneurship programs or corporate venture studios continuously fill the pipeline for new ventures to be validated in the early stage. One of our previous articles here describes how a portfolio approach should be structured and launched: “https://pioneers.io/500-venture-strategy/”. 

Nevertheless, the challenge of developing and scaling ventures successfully, thus creating a strong venture portfolio, lies within the access to sufficient outstanding talent and their time working on the ventures as well as access to risk capital financing these ventures. Both pillars are usually scarce resources within regular corporate environments.

But not only within corporations these two key resources for successful ventures are scarce. Startups and scale-ups outside of corporate environments are looking for similar resources, thus attracting talent for corporate ventures needs the right strategy and incentive structures that can compete with competition on the market. Furthermore, risk capital investors such as VCs financing startups are usually cautious when corporates are involved in venture activities and are not taking it into consideration for their investment strategies.

This results in a triangle of needs and offerings which can lead to an attractive sweet spot to be considered:

Sweet Spot for Corporate Ventures: Combining the subjects above we see a strong value proposition for corporate ventures that are able to secure access to much-needed assets to fast-track (corporate), fully dedicated entrepreneurs (talent), and risk capital to grow (venture capital).

Leveraging the assets mentioned in combination with a strong anchor in the overall corporate strategy could provide corporate ventures with the necessary unfair advantage to become successful and position themselves in the market long-term.