Large companies can innovate in different ways. In an earlier article, we discussed possibilities such as forming a growth team. But corporations can achieve the same goal by teaming up with startups. In this way, they stay close to emerging trends or establish a funnel for corporate venture capital investments.

Corporate Accelerators and Venture Capital Firms

In many instances, this collaboration is accomplished through a corporate accelerator. That is a startup accelerator which is sponsored by an established corporation. They support early-stage startup companies through mentorship and often capital and office space.

Another way to invest in early-stage companies is by participating in venture capital firms (VCs) which invest in startups in exchange for equity or an ownership stake in the companies they invest in.


Why Investing in Startups is Good for You

The partnership between corporations and early-stage companies is beneficial for both. This can be proven by describing some great corporate programs, and showing you what’s in it for both startup and the legacy company.

Salesforce Ventures

Salesforce Ventures is Salesforce’s strategic venture arm focused on creating the world’s largest ecosystem of enterprise cloud companies. Since 2009, they’ve formed partnerships and helped accelerate the growth of over 250 technology startups. Among them are innovative companies such as Anaplan, Box, DocuSign, Dropbox, Evernote, FinancialForce, GainSight, Kenandy, Layer, MuleSoft, and StayClassy.

It is a win-win situation: while portfolio companies receive funding and gain a competitive edge through the guidance of Salesforce’s innovators and executives, the big corporation keeps expanding its ecosystem and stays ahead of the technological curve.

Microsoft

Microsoft has 4 programs that collaborate with startups:

  • Microsoft for Startups is a new program that delivers access to technology, go-to-markets, and community benefits that helps startups grow their customer and revenue base.
  • Microsoft Reactors are spaces designed to foster learning, networking, and resource sharing within local startup and developer communities.
  • Built to accelerate the success of enterprise-ready companies, Microsoft ScaleUp grants startups access to Microsoft partners and customers, makes valuable business connections, and provides access to a network of technical knowledge.
  • As the corporate venture arm for the company, Microsoft Ventures typically invests in enterprise software companies in the Series A through C funding stage. As part of its value-add to portfolio companies, Microsoft Ventures offers access to strategic go-to-market resources and relationships globally.

What’s in it for the tech giant? Microsoft gets an early selection of new players on the market for possible future purchase, and it kindly brings new companies into the Microsoft ecosystem. The startups receive funding, valuable contacts, and a chance to grow.

AIA and Konica Minolta

AIA (Hong Kong) and Konica Minolta (Japan) are the organizers of the AIA – Konica Minolta Digital Health Accelerator in Singapore which supports innovative, tech-savvy companies with cutting-edge concepts that could take healthcare into a new dimension.

The accelerator is located at EDGE LAB, the heart of the startup ecosystem in Singapore. In this collaborative environment, the fresh entrepreneurs learn from the other accelerator participants, bounce ideas off each other, and grow their network. Furthermore, mentors will help them grow their business.

These are tremendous benefits for the startups, so why would AIA and Konica Minolta be so generous? In an interview, Yuji Ichimura, Executive Officer at Konica Minolta, explains, “Working with the startup community provides an opportunity for us to increase our speed of development of new products and technologies to create new value and solutions for our customers.”

In-Q-Tel

Being a non-profit, In-Q-Tel is not a corporation in the strictest sense, but it is too fascinating not to describe. The Central Intelligence Agency’s venture capital arm invests in high-tech companies for the sole purpose of keeping the CIA and other US intelligence agencies equipped with the latest in information technology. Here are some amazing firms the CIA invested in:

  1. Sonitus offers a wireless, two-way communications device that can be hidden inside the mouth.
  2. Cylance built a solution that analyzes and kills malware well before it becomes a problem.
  3. MindMeld is the builder of voice recognition technology.
  4. SnapDNA developed a handheld device that can analyze DNA in minutes.
  5. Palantir’s software links together the Big Data gathered by CIA, NSA, and other agencies.

Funding is not the only benefit for startups. In-Q-Tel’s investment team gauges the potential for long-term success by evaluating each company’s commercial potential, business plan, and management team. Once an investment is made, In-Q-Tel works with the company and the partner agencies to complete a work program and facilitate solution delivery.


We Invest In Companies

These are really inspiring examples of startups and corporations collaborating. Now you understand why RevelX takes minority stakes in companies we believe in, either with our own capital or we arrange larger stakes through our extensive network of Private Equity, VCs, and Angel investors.

We like to become part of the businesses we invest in. Investing for us is both sharing risk and rewards. You can count on us to take responsibility and accelerate the growth process of your company. And our commitment is long term. Please feel free to contact me if you are interested!

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