CORPORATE VENTURING

CORPORATEVENTURING

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tools for disruptive innovation

40% of companies will be dead in 10 years

said ex-Cisco CEO John Chambers in 2015

Everybody’s talk ing about staying ahead of the game, but…

How fast is the business landscape real ly changing?

LET’S HAVE A LOOK…

Technology feels l ike i t ’s accelerat ing, because i t actual ly is

1600 1700 1800 1900 20001650 1750 1850 1950 2050

Printing Press

1st Driverless Car

First 3D Chip

MicroprocessorWordprocessorMS-DOS

Apple MacintoshWindowsWWWCell Phones

Hybrid Cars

GoogleYoutubeiPad

3D Movies

DVDs

Telegraph

Man on Moon

Car

Telephone

Light BulbSteam EngineTelescope

Exists for 9 years

3.1 million rooms

$30 billion market cap

active in 191 countries

Exists for 60 years

1.1 million rooms

$17.8 billion market cap

active in 110 countries

2008

Airbnb started from scratch and has now reached double the market cap of Marr iott , with tr iple the amount of rooms

In 9 years…

1937 2009

active in 70 countries

Exists for 8 years

1 million rides/day

$70 billion market cap

Exists for 80 years

0.85 million units/day

$74 billion market cap

active in 110 countries

Uber reached approximately the same market cap as Volkswagen without owning a s ingle car

In 8 years…

Pokémon GO was downloaded 130 mil l ion t imes, with a revenue of $206.5 mil l ion

In 1 month…

Market leader 1998

Profits nosedive 30% 2009

Market leader 1999

Bankruptcy 2012

The increasing speed of change made i t hard for some establ ished dinosaurs to keep up

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Want to team up and tackle new markets together? Reach out to Andreas and get our conversation started!

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Age

Mar

ket

Cap

5025

$25B

$50B

$75B

$100B

$200B

$300B

$400B

$500B

75 100 125

The new kids in town are more than just a hype

DATE OF $1B VALUATION OF PRIVATE UNICORN SINCE 2011

And they are only disrupting further

2011 2012 2013 2014 2015 2016 2017

Pretty fast, huh?

“ In the new world, i t is not the big f ish which eats the small f ish, i t ’s the fast f ish which eats the s low f ish.”

The Customer O f Tomorrow is your new CEO

So now what?

How can corporat ions be pro-act ive?

Corporate dinosaurs avoid ext inct ion by corporate venturing, to hunt for startup unicorns

61.7% of the unicorns mentioned by the Wal l Street

Journal under the Bi l l ion Dollar Startup Club have raised

funds from at least one corporate

(not including investment f i rms and banks)

Corporate venture init iat ives are popping up everywhere

There are about 1 ,300 corporate venture units out there, a lmost double the amount of 6 years ago

Niche market venture units are r is ing, even in tradit ional non-technology industr ies

BEER SPIRITS ENTERTAINMENT TRAVEL AUTOMOTIVE

So what does corporate venturing mean?

Corporate venturing can take many forms. At i ts most basic, i t can be purely a f inancial investment with a

larger company taking an equity stake in a smal ler company

This is most often done through a separate fund being set up specif ical ly to invest in startup and growth companies, done in the

same way as tradit ional venture capital f i rms

Why use corporate venturing?

As a corporate venture, your smal l team is able to steer their course with more freedom, act quickly and more independently, and experiment with the opportunit ies ahead.

SPEED

The opportunity to operate freely also al lows for new core businesses.

Knowing that the average l i fespan of a company in the S&P 500 index has decreased from 61 years in 1958 to just 18 years today, i t is never a bad idea to start explor ing alternate options of future growth.

NEW CORE BUSINESS POTENTIAL

When scouting for the future and discovering new options, you are forced to gradual ly learn about new and emerging markets.

A wider market window is s imply more ground to cover, requir ing your employees to broaden their v is ion and gain new insights that can also be appl ied to your current market.

A WINDOW ON THE MARKET

Venture invest ing is in essence r isky, but the greatest r isk is not to invest at al l .

Launching new ventures to the market goes faster, spreads r isk and leaves room for error. Yet the reward, f inding an idea or concept that speaks to the consumer, remains.

RISK MITIGATION

RISK

The entrepreneurial ism and the pioneering spir i t that prevai ls in young technology f i rms helps to st imulate a unique innovat ion culture and to incorporate external intel l igence.

CULTURE

Read more about ‘Why Corporate Venturing is Key for Innovation’ on our Blog!

KICKSTART YOUR VENTURE

How does a company ‘do’ corporate venturing ?

There are many ways to get engaged in ventures

CORPORATEVENTURING

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Let ’s highl ight the most common types

CORPORATEVENTURING

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Sweden’s biggest phone carr ier Tel iaSonera’s interest was a joint partnership in innovat ion with Spoti fy.

01

In 2014, raised $115 million from for a 1.4 percent stake

CORPORATE VENTURE CAPITAL

Corporat ions use direct equity investments to target startups of strategic interest .

Why? The answer is probably user growth. Over 500 mil l ion people used WhatsApp monthly at the t ime and

added more than 1 mil l ion users per day.

02 Establ ished f i rms purchase startups or young companies and their commercial-ready products in order to access new technologies or markets.  

MERGERS & ACQUISITIONS

acquired for 19 billion $In 2014,

03CORPORATE ACCELERATOR

Accelerators offer highly structured programs that typical ly last no more than three months. These programs provide startups that do not yet have proven products or services with the faci l i t ies, resources, and expert ise needed to speed their product

development and t ime to market.

The 3 year old AI technology startup joined the 6-month virtual program. In 2016, MasterCard has partnered with Rainbird to

implement the latter 's art i f ic ial intel l igence technology.

6-month programIn 2015, was the only British company selected for the

Jaunt announced that i t has l icensed Disney Research's cutt ing-edge VR video technology and wil l be col laborat ing with Disney

Research to integrate i t into Jaunt 's Cloud Services.

These partnerships offer the same advantages of regular corporate accelerator programs, but are run in partnership with external part ies

that have the blueprints for the program.

CORPORATE ACCELERATOR PARTNERSHIP

was presented at the demo day of the powered byIn 2016,

03 B

04CORPORATE INCUBATOR

This includes mentoring and value-added services to support entrepreneurs bui lding viable, market-ready ideas.

A corporate incubator starts even before the idea is created. The startup's success is a win for Coca-Cola as an investor, gives them access

to new markets, and lets them leverage their assets in new ways.

empowers startups from from scratch to scale-up, like

In-house incubators function as startups within a corporate sett ing. Teams of intrapreneurs convene for short projects, during which they rapidly prototype new

products or services to test a minimum viable product by the end of the project. In-house incubators do not involve the R&D department.

IN-HOUSE INCUBATOR

“Area 120 is a new approach, part incubator, part new take on the spir i t of the 20% t ime program,” said CEO Sundar Pichai .

Right now, is setting up AREA 120

to birth companies from intrapreneurs

B04

Bundl is a venture development studio teaming up with corporates to create new ventures from scratch and

tackle new markets together.

05VENTURE DEVELOPMENT STUDIO

A venture development studio, startup studio, company bui lder or venture bui lder, is a structure that creates repeat startups based on shared resources

and a mult idiscipl inary team. I t provides Startup as a Service (SaaS) .

created and launchedAt the end of 2016, with an undisclosed consumer bank

"Adidas go lets your energy level control the music that plays during your run, so you're always in control . For the f i rst t ime, instead of

runners l istening to music, music wi l l l isten to runners,” said Adrian Leek, General Manager of Adidas Running.

06STRATEGIC PARTNERSHIP

All iances between establ ished corporat ions and startups can take many forms, including the co-development of products and services.

partnered withIn 2015, to launch

VENTURE DEVELOPMENT

INCUBATOR

ACCELERATOR CVC INVESTMENT

M&A

STRATEGIC PARTNERSHIP

INNOVATION PROJECTS

CURRENT MARKETS

NEARBY MARKETS

NEW MARKETS

WHAT’S THE INNOVATION SPEED YOU CAN MAKE IN 2 YEARS?

Read more about ‘How to do Corporate Venturing’ on our Blog!

KICKSTART YOUR VENTURE

CORPORATEVENTURING

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And here are the other types of corporate ventures

07HACKATHON

The goal of the hackathon is to discover and explore how digital technology can help grow and further reinforce a sense of community and belonging that transcends locat ion,

providing a meaningful shared footbal l fan experience for everyone.

A focused workshop where software developers come together to col laborat ively f ind technological solut ions to a corporate

innovat ion chal lenge.

On February 10th 2017, kicked off to discover new football fan experiences

Check out our Disruption Derby The perfect hackathon formula to disrupt your industry

KICKSTART YOUR VENTURE

08ACQUI-HIRE

Acqui-hir ing is the process of acquir ing a company to recruit i ts employees, without necessar i ly showing an interest in i ts products and

services—or their continued operat ion.

“We have always focused on hir ing smart , ta lented engineers. Their entrepreneurial spir i t and desire to make an impact makes them great addit ions to Facebook,” says Facebooker Phi l l ip Su.

acqui-hired the British firmIn 2013, for certain assets and employees

09 A means to grant startups access to resources whi le the establ ished corporat ions get closer to the entrepreneurial ecosystem.

SHARING RESOURCES

A co-working space l ike Co.Stat ion’s is a good example of shar ing resources with startups. The goal is st imulat ing entrepreneurship and providing the

startup/scale-up community with the tools to innovate & grow.

launched its second to boost and access the digital ecosystem in BelgiumIn 2016,

On behalf of corporates, x3Fab creates and del ivers digital startups with their team, in their off ices, with

their methods and their control over capital .

10 This structure lets development studios use their own external team to carry out venture projects on behalf of a third party, indiv idual or company.

EXCUBATOR

In 2016, launched as an excubator for corporate ideas

“The entrepreneurs-in-residence play an important role in Target ’s overal l innovat ion portfol io. West, Greg and David are bui lding new businesses inside Target in a way that ’s never been

done before and we think there’s massive potential to grow by working dif ferently, ” said Target ’s Chief Strategy and Innovat ion Off icer Casey Carl .

11ENTREPRENEUR-IN-RESIDENCE

An Entrepreneur-In-Residence is an informal and usual ly temporary posit ion at the corporate venture capital arm of the company. EIRs introduce organizat ions to new business models, technologies, and strategic partnership opportunit ies.

EIRs bui ld br idges into the startup community.

turned to West Stringfellow and 2 others as entrepreneurs-in-residence In 2015,

This unique competit ion is organized by SevenVentures, the venture capital arm of European media giant ProSiebenSat.1 . With the

backing of i ts parent company, SevenVentures is able to provide mil l ions of euros worth of media to the winners of the pitch day.

12CHALLENGE PRIZE

An open competit ion that focuses on a specif ic issue, offer ing an incentive to f ield innovators to develop the best solut ion.

Since 2009, has organised its annual competition for start-ups

SCOUTING MISSION

The establ ished company appoints an indiv idual within a given industry to scope out innovat ion opportunit ies in al ignment with the corporate strategy.

13 1EMPLOYEE JURORS/MENTORING

These team members part ic ipate in startup competit ions to spot emerging technologies or business models early.

14

LICENSING

This enables corporat ions to apply innovat ions developed by startups to new markets, industry sectors and customer segments.

16

CORPORATE UNIVERSIT Y PARTNERSHIPS

Collaborat ions between corporate R&D departments and univers ity researchers to f ind promising ideas for further development and invest igat ion.

15

More insights on how to choose from the Venturing Toolkit

ECOSYSTEM INNOVATION

VENTUREDEVELOPMENT

STRATEGIC PARTNERSHIPS

CULTURE NEW MARKETS

EVENTS

Creating a platform for startup engagement

SHARING RESOURCES

Entrepreneur-In-Residence,Corporate University Partnership

ACCELERATORSCorporate & Partnership

INCUBATORSCorporate, Inhouse & Excubator

CVCINVESTMENT 01

02

03

04

05

06

OT

HE

RS

MERGERS & ACQUISITIONS

M&A, Acqui-Hire

Rejuvenate corporate culture

For current or nearby markets

For new sectors or target groups

Hackathon, ChallengePrize, Scouting Mission

Co

rpo

rate

Ven

turi

ng

To

ols

Corporate Objectives

Most recommended

Recommended

Least recommended

Read more about ‘Choosing the right Venturing Tool’ on our Blog!

KICKSTART YOUR VENTURE

How do these ventures work within the organization?

A corporate spin-off , a lso known as a spin-out, or starburst , is a type of corporate act ion where a company "spl i ts off" a sect ion as a separate business. Either the unit or operat ion of the startup company does not f i t in with the exist ing market, or the aim is

to unlock value for shareholders.

YOU CAN SPIN OFF

YOU CAN SPIN IN

Spin-ins develop technology and products that are al igned with the object ives of the parent f i rm while maintaining act iv i t ies on a separate balance sheet. I f the startup

meets a desired milestone, i t is absorbed by, or spins into, the mother f i rm.

A spin-along is a combinat ion of a spin-off and a spin-in. Spin-alongs ‘spin out ’ non-core act iv i t ies but st i l l get dominant control from the parent company. I t offers the company the opportunity to external ize innovat ion act iv i t ies that don’t match the

exist ing business.

OR YOU CAN SPIN ALONG

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