Corporate entrepreneurship: Driving growth for startups and companies

While established companies need to find ways to stay ahead of the competition, startups are often at the forefront of innovation but don’t have the resources to achieve their goals fast enough. Corporate entrepreneurship, also known as intrapreneurship, emerges as a critical strategy to bridge this gap. It encourages established companies to act entrepreneurially, fostering a culture of innovation and risk-taking within their own structures. 

This win-win relationship allows established companies to gain access to innovation, agility, and talent allowing them to stay ahead of the curve. At the same time, startups can gain access to resources, credibility, and talent. So, by understanding the different types of relationships, the benefits and challenges for each party involved, both can leverage corporate entrepreneurship to achieve their strategic goals. 

Types of relationships between established businesses and startups

There are several ways established businesses and startups can collaborate, each offering unique benefits and considerations: 

• Partnerships: This involves co-creation of products or services, joint marketing initiatives, or strategic alliances. Benefits include shared resources, risk mitigation, and access to new markets. Challenges include aligning goals, managing intellectual property, and potential cultural clashes. 
• Acquisitions: Established companies can acquire promising startups for their talent, technology, or market position. Benefits include rapid access to innovation and talent, but challenges include integration costs and cultural differences. 
• Corporate Venture Capital (CVC): Established companies invest in promising startups through dedicated venture capital arms. Benefits include exposure to early-stage innovation and potential for high returns, while challenges involve managing risk and ensuring alignment with the core business. 

Corporate venturing: A strategic approach to engaging with startups

This approach goes beyond simply throwing money at innovative ideas. It involves investing in promising ventures aligned with goals, partnering on projects like R&D or marketing, or acquiring innovative startups for their tech or talent. This requires a well-defined strategy, dedicated resources, and a commitment to fostering a culture of innovation within the larger organization.  

How corporate venturing works 

Here's a breakdown of the corporate venturing process: 

1. Strategic alignment: defining goals for corporate venturing, such as accessing new technologies or entering emerging markets. 
2. Scouting and evaluation: identifying promising startups that align with these goals through market research and industry events. 
3. Investment/partnership structuring: deciding on the type of collaboration (partnership, acquisition, CVC investment) based on the startup's stage and strategic fit. 
4. Integration and support: providing resources, mentorship, and clear communication channels to facilitate successful collaboration. 

A startup perspective on corporate entrepreneurship

There are many benefits for startups that partner with or are acquired by established companies: 

• Access to resources: established companies have access to resources that startups can't afford. This includes capital for funding, established distribution channels to reach new customers, and the expertise of a larger, experienced organization. 
• Expert pool: partnering with established companies allows startups to tap into their deep talent pools providing access to experienced professionals and specialized skills that can accelerate the startup's development. 
• Credibility boost: an established company can significantly enhance a startup's credibility in the marketplace leading to a stronger brand image, attract new investors, and open doors to new business opportunities.  
• Accelerate Growth: established companies have the infrastructure and market reach that startups can leverage to rapidly scale their business allowing them to significantly accelerate a startup's growth trajectory. 

Before diving into collaboration, startups should carefully consider several factors. Aligning goals is crucial – ensure your vision and strategic objectives are compatible with those of the established company. Maintaining control is also important. Negotiate clear terms that protect your intellectual property rights and ensure you have a say in key decisions. Finally, assess the company culture fit. A good fit is essential; your startup's values and operating style should mesh well with the established company's culture for a successful partnership. 

A company perspective on corporate entrepreneurship 

There are also many benefits for established companies that partner with or invest in startups: 

• Fueling innovation: startups are often at the forefront of innovation, and partnering with them grants established companies access to cutting-edge technologies, fresh perspectives, and the ability to stay ahead of the competition. 
• Increased agility: established companies can learn from the agility of startups, and these collaborations can help them respond more swiftly to market changes and evolving consumer demands. 
• Identify new markets: it allows established companies to explore emerging technologies and business models through collaboration with startups. 
• Reduced risk: investing in startups inherently carries risk, but it can also be highly rewarding. By partnering with or investing in startups, established companies can spread the risk and increase the chances of success. 

Venturing into the world of corporate entrepreneurship isn't without its challenges for established companies. Overcoming internal bureaucracy can be a major obstacle, as established processes and approval structures may end up slowing down collaboration with fast-moving startups. Bridging cultural differences is another challenge. The established company’s culture tends to be more formal and risk-averse compared to the often informal, impulsive, and entrepreneurial spirit of startups. Finally, defining clear success metrics to measure can be difficult since innovation often has a long-term payoff. Assessing the return on investment (ROI) from corporate entrepreneurship initiatives requires a strategic approach. 

How can an established business get started in corporate entrepreneurship? 

If you're an established company that's interested in corporate entrepreneurship, there are a few things you can do to get started: 

1. Define your goals: what do you hope to achieve by partnering with or investing in startups? Are you aiming to access cutting-edge technology, gain market share, or fuel internal innovation? 
2. Identify the ideal startup partner: what kind of startups are you interested in working with? What industry, size, and stage of development? 
3. Develop a well-defined strategy: How will you approach startups? How will you find and connect with promising startups? What type of partnership or investment model aligns with your goals (e.g., joint ventures, acquisitions, venture capital funding)? 
4. Build strong relationships: Get to know the startup community and build relationships with potential partners. Attend industry events (like Promoting Entrepreneurship or the Esade Entrepreneurship Summit), connect with startup accelerators (like Esade eWorks), and engage with potential partners to foster long-term collaborations. 

Best practices 

For established companies: 

• Foster a culture of innovation: encourage a culture that embraces experimentation, risk-taking, and collaboration across the organization. 
• Build a dedicated team: establish a team with expertise in identifying promising startups, structuring deals, and managing partnerships. 
• Set long-term goals: corporate venturing is a marathon, not a sprint, so set realistic expectations. This long-term game so be patient, learn from setbacks, and focus on achieving long-term success. 
• Maintain open communication: establish clear communication channels between the corporate venturing team, startups, and relevant stakeholders within the established company. 

For startups: 

• Target the right partner: research established companies with strong corporate venturing programs and goals that align with your startup's vision, culture, and values. 
• Define a compelling value proposition: define what your startup brings to the table – innovative tech, disruptive model, or market access –. Focus on how you can address a challenge the established company faces or help them achieve their strategic objectives. 
• Master your pitch: develop a clear, concise pitch that highlights your startup's idea, value, and potential benefits for the established company. Practice and tailor it for each partner. 
• Network & connect: build relationships with individuals involved in corporate venturing at established companies. Attend industry events, participate in conferences, and connect on platforms like LinkedIn. 
• Be flexible & collaborative: established companies have different processes and decision-making timelines than startups. Adapt your approach to the established company's processes and collaborate effectively for a win-win outcome. 
• Manage expectations: building a successful partnership takes time, don’t expect instant results. Focus on trust, value delivery, and fostering a long-term collaboration. 

Building relationships is key to getting your foot in the door

Corporate entrepreneurship can be a win-win for both startups and established companies. By working together, both parties can benefit from the unique strengths and perspectives of the other. If you're interested in corporate entrepreneurship, there are a few things you can do to get started. For startups, do your research, be prepared, be professional, and be persistent. For established companies, be open-minded, be patient, be flexible, and be supportive. 

Looking to learn more?

If you're ready to go deeper into the world of corporate entrepreneurship, consider attending cro on April 5th, a one-morning event designed to connect researchers, founders, and innovation managers. There you'll gain practical insights and actionable strategies to unleash your inner startup and drive growth within your organization.