TLDR:
- Large companies are increasingly interested in collaborating with startups
- Two popular models for collaboration are investing in startups and venture clienting
An increasing number of large companies are looking to collaborate with startups, but the best approach to this can vary depending on the business need and the startup’s stage. Two main models have gained popularity in recent years: equity investment in startups with subsequent collaboration, and collaboration without the equity investment, known as “venture clienting.” Corporate venture units are focusing on developing integrated business development teams to ensure that their portfolio companies engage in partnerships with the parent company. Companies like BMW i Ventures have hired business development managers, such as Inga Grieger, to facilitate collaborations. On the other hand, many large companies have established venture clienting units to quickly partner with startups without investing in them, allowing for more experimental collaborations.
Siemens Energy Ventures and JetBlue Ventures are examples of companies that have embraced both venture clienting and CVC investment models to address different innovation needs. While venture clienting allows companies to explore a wider range of technologies, CVC investing provides the opportunity for close collaboration and influence over a startup’s development. Venture clienting is more of a pull approach, where the operations team works closely with business units to identify needs and find matching startups, while CVC investing is a push approach where the investment team identifies promising startups and suggests collaborations. Venture client teams focus on more mature startups, while CVC investors can engage with startups at an earlier stage.
Both models involve different levels of involvement in pilot projects and proof-of-concept initiatives. Venture client teams often spend time coaching business units on running these projects, setting clear timelines and KPIs for evaluation. In contrast, CVC platform teams are more hands-off once the initial introduction is made. Ultimately, the choice between venture clienting and CVC investment depends on the company’s innovation needs, the stage of the startup, and the level of involvement desired in the collaboration.
