Many corporates want to innovate outside of their core business and spin out startups to create new revenue streams. However, founding a company is associated with challenges and often results in unnecessary costs. Corporate venture builders (also called “company builders” or “startup factories”) aim to solve this problem by providing the most critical success factor: a dedicated, entrepreneurial team with a proven track record that can avoid common mistakes when launching a venture. Check out our guide to discover if corporate venture building is suitable for you and what different forms there are.
Venture builders, also known as company builders or venture studios, are organizations dedicated to launching startups on a regular basis.The primary objective of a venture builder is to swiftly validate a business idea, assuming an interim leadership role in building the venture and assembling a talented team who will eventually take over the reins. To accomplish this, venture builders leverage their in-house resources which include experienced serial founders, skilled marketers, proficient developers, and other domain experts.
Venture builders play a crucial role in the success of building new businesses, as they offer a high level of autonomy. In the realm of corporate venturing, venture builders actively participate in the startup process by contributing to product development, acquiring initial customers, and assembling the core team. What sets venture builders apart is their ability to adapt to the client's needs. If desired, they can take full responsibility for the entire venture setup, essentially delivering a "turnkey" solution for the new company.
Venture building is a comprehensive addition to the open innovation ecosystem. With its hybrid model, it offers flexible options tailored to diverse needs. The nature of the engagement varies, as venture builders may take company shares or work on a service fee basis. However, distinguishing and understanding the reasons behind these different approaches can be challenging, as the boundaries often appear blurred. A very common approach, however, is to pay attention to the proximity to the core business as well as the "level of control" that the corporate wants to perform on the new startup.
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In the guide, you will gain an overview of the best known venture building models:
- Internal venture building units
- Corporate venture building as a service
- Corporate venture building partnership
- Corporate venture building and venture capital partnership
- Pure corporate venture capital