Venture building today is not only about creating new businesses but also a necessary investment to defend against disruptive threats. Established firms may find it necessary to build a separate venture from scratch using different means, such as a corporate venture builder, in hopes of keeping up with the ever-changing markets and exploring new opportunity spaces.
However, how effective can this model be when even industry giants have stumbled in their innovation endeavors despite wielding vast resources? The answer may be found at the core of innovation itself.
Why Corporations Must Innovate Their Business Now
If 2023 has proven anything, it’s that innovation has been accelerated. What historically made a company successful may no longer be feasible during or after the crisis. The familiar business landscape has been completely reshaped, potentially creating unique opportunities for explosive growth. Companies that cannot keep up with the pace of innovation risk losing customers to their competitors.
Even large corporations are being urged to optimize their strategies and embrace innovation as soon as possible. However, change can be daunting and costly, and predictable growth may no longer hold true during this time of uncertainty. As a result, many big firms opt to reduce costs and implement sustainable strategies to safeguard their core business.
Consequently, organizations find themselves in a dilemma. They want to innovate but lack the flexibility to execute it. One emerging trend to overcome this challenge is to embrace venture building. By investing in entrepreneurial initiatives, corporations can expedite the innovation process through new ventures while minimizing potential risks to their core businesses.
However, not every company is good at venturing, and successful startups require more than just good ideas. It needs a different approach in development, validation, implementation, and management, where speed to market is the key. Unfortunately, corporations, due to their “stable” structures, frequently find it challenging to keep up with such rapid-paced innovation.
This is where Corporate Venture Builder comes in!
What Is A Corporate Venture Builder
In a nutshell, venture builders specialize in enabling corporations to drive innovation by either building, sponsoring, or investing in startups with the assistance of an external team of corporate venture builders. These initiatives allow firms to gain early access to new technology solutions for both strategic and financial advantages.
Corporate venture builders often narrow their focus to specific industries specialized by the corporation. A retail giant is more likely to invest in supply chain tech ventures, while a large F&B firm would be interested in innovations related to inventory management.
Corporate Venture Builder Vs Corporate Venture Capital Vs Accelerator
Contrary to the wide portfolio approach of Accelerator and CVC, Corporate Venture Builder has to be very selective to take full advantage of a corporation’s resources. This is due to the higher level of ownership and control that corporations have over the startup.
Additionally, corporations only engage with venture builders boasting a track record of successful entrepreneurship, extensive networks, and cross-industry expertise to assist them in building a startup from the ground up. Payment can take the form of equity, fees, or a combination of both.
CVC and Accelerator on the other hand, only have partial influence over the startup within potential areas of integration and are incapable of supporting corporates along the full value chain of venture building.
Corporate Venture Builder’s Role In Accelerating Innovation
Innovation has always been a part of the business landscape since its inception. What sets today’s business environment apart is the breakneck speed at which companies bring products to market, as well as the constantly evolving approach to innovation.
This shift in the approach to startup management highlights the need to redefine corporate venturing at its core, with a focus on long-term interests right from the beginning. Instead of waiting passively for the right startups to emerge, as is often the case with CVCs or accelerators, corporate venture builders assist businesses in creating their own startups, validating ideas, and nurturing innovation.
As a result, the required commitment and budgetary allocations are significantly higher. Success in corporate venture building hinges on the ability to continuously adapt to changing conditions, whether they stem from internal challenges or external disruptions. It’s all about the principle of ‘test fast, iterate fast’ to achieve genuine breakthroughs.
Corporate resources such as intellectual property, assets, and funds are leveraged to their maximum potential under the guidance of the corporate venture builder. They also bring essential blueprints, key talents, and external networks to ensure that these startup initiatives align with the corporate vision, goals, and expectations.
Conclusion
At its core, a corporate venture builder industrializes the entrepreneurship process using proven methodologies, along with the right team and corporate resources. It doesn’t shy away from the inherent venture risks; instead, it actively tackles and mitigates disruptions to maximize the chances of success within the shortest timeframe.
However, the effectiveness of this model depends on businesses having the patience and trust in the venture builder they choose to collaborate with. This trust is essential to persevere through the challenges that may arise during the process of reinventing themselves for a brighter future—a future founded on the promise of an early-stage, bootstrapped startup.
If this model piques your interest, we highly recommend reaching out to a reliable Venture Builder or Venture Studio that values and aligns with your vision.
