Takeaways
Open innovation is significant for sharing information and knowledge in the business world. The study “Corporate Venturing Squads: Teaming Up with Other Corporations to Better Innovate with Startups,” conducted by our academic partner IESE in collaboration with Kapita and supported by the EU-LAC Digital Accelerator, explores the idea of corporate venturing for business collaborations. So, what is the secret to forming successful partnerships and making all the right moves?
As IESE Business School explained in a recent Harvard Business Review’s article, corporate venturing has been described as a David-and-Goliath cooperation in the business world. Established companies seek innovation by partnering up with agile startups via a range of mechanisms, including scouting missions, hackathons, venture clients, corporate incubators, and accelerators. These partnerships have the potential to yield breakthrough innovation quickly and at a relatively low cost, and in recent years, such efforts have become one of the mainstays of the innovation landscape.
But sometimes it pays to expand the relationship and get more corporations on board — even those that might be competitors. Such counterintuitive collaborations, called corporate venturing squads, have the potential to generate value, including knowledge sharing and cost-effective growth opportunities, to name a few. As long as we clearly understand the game, everyone can benefit from this mutually rewarding experience.
To make informed decisions and increase the chances of success in the adventure, it is crucial to understand the rules and play with the right cards. In order to assist leaders in understanding various strategies and executing them effectively, the IESE Business School study has presented a guide on the six types of corporate venturing squads:
- Scouting force: This is a one-shot initiative aimed at testing the waters of collaborative innovation by bringing opportunities to corporations — a way to interact and see what startups are doing.
- Scouting platform: This mirrors the purpose of a scouting force but as a recurrent collaboration. Scouting forces can turn into scouting platforms after a successful first-time experience.
- Joint proof of concept (PoC): Two or more corporations collaborate with a startup to develop (or enhance) a product or service in a one-time collaboration.
- Partnership: Recurrent joint PoCs among squad members with either the same or different startups.
- Co-investment: A partnership that offers investment opportunities for startups as a one-time deal (i.e., one joint investment in one or more startups).
- Joint fund: A structured investment vehicle that involves multiple investment rounds in one or several startups.
In the context of our EU-LAC Digital Accelerator, the scouting platform is the equivalent of our matching platform. On the one hand, we offer an opportunity for corporates and leading companies, with an established business willing to face the challenges of Digital Transformation, through collaboration with startups. On the other hand, we are supporting startups, scaleups, and SMEs with innovative digital-based solutions, providing finished products or services and willing to expand internationally.
As an outcome of this matching process, and the connection between corporates and startups willing to develop joint collaborations, the EU-LAC Digital Accelerator supports the EU-LAC Partnerships generated providing high-impact acceleration. By bridging the gap between Europe, Latin America, and the Caribbean, we aim to boost digital transformation in those regions.
You have access to the piece of research here!
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