Engaging with Startups to Enhance Corporate Innovation

Startups can be a powerful, effective ingredient in achieving a corporate innovation strategy. But startups worry that corporates are going to steal their ideas, and are too slow in their decision-making. Startups welcome corporate capital, but often their real needs are access to a corporation’s latest tools, technologies, channels, and customers. Large companies have multiple resources with which to engage startups. It isn’t just about money. Traditionally, large companies have deployed equity-based models of engagement, such as corporate venture capital. CVC has a role to play, but takes significant time and effort to manage. Equity-based models provide control, but don’t scale. Newer models of engagement with startups use a logic of influence, so that large companies can move faster and work with many more startups at the same time. These models relinquish control, but are built to scale.