Why Venture Collaboration is the Future of Corporate R&D

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What can venture capital firms offer startups?

Money, foremost.

Mentorship, usually.

Publicity, street cred, and validation are typically part of the deal.

What’s missing in the traditional VC model may be why many startups fail: critical strategic services.

Instead, early commercial validation, support from established corporate partners, and a community of investors and strategists create a powerful venture collaboration approach. In this model the corporate partner is key. Venture collaboration benefits the corporation as much as it does the startup by acting as an options-based R&D engine for its product portfolio.

Rather than fearing outside innovation as a threat to the core business, venture collaboration allows established corporations to stay ahead of the development curve.

Year over year the State of Startups reports published by First Round Capital have surveyed hundreds of founders and revealed that the foremost concerns were:

  1. Hiring good people
  2. Acquiring customers
  3. Revenue growth

The venture collaboration model addresses these concerns by providing startups with access to the right people to build their businesses from both a talent perspective as well as customer acquisition at all stages of development.  Startups can also expect a wealth of advice from established corporate partners, opportunities to pilot field tests and case studies that lead to early market validation.

Often organizations create their own venture accelerator models. It’s easy to see why demand-driven investment is superior to a purely VC or accelerator approach. Corporations participating in programs like TechNexus’s EMERGE Co-Lab, which focuses on wearable tech ventures for first responders, are granted inside access to leading-edge technology in a variety of formats  like V2V communications, LED-lit apparel, location monitoring, and more. Rather than fearing outside innovation as a threat to the core business, venture collaboration allows established corporations to stay ahead of the development curve.

Pathfinder or Horizon 3 projects that require in-depth research, trendspotting, and several rounds of development iteration–the projects that can truly innovate, are even less likely to be funded by corporate R&D because of the seemingly distant payoff.

Startups benefit equally, or arguably more, from this symbiotic relationship in the form of…

  1. Access to an established customer base
  2. Real-time feedback
  3. Market knowledge
  4. Opportunity to grow an ongoing relationship with a potentially game-changing customer

Startups empowered through venture collaboration gain unprecedented access to mindshare from crucial corporate players, customers, and industry leaders. An overwhelming increase in enthusiastic corporate involvement is evidence of the growing interest in demand-driven investment. Venture Collaboration is a smarter investment model and a force multiplier poised to become the future of corporate R&D.

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