Seven 'Corporate Venturing' Strategies to Foster Innovation (and Create an Environment for Long-Term Growth)

Lex Research Topics in Corporate Law & Economics Working Paper No. 2016-7

TILEC Discussion Paper No. 2016-023

29 Pages Posted: 16 Aug 2016 Last revised: 13 Oct 2016

See all articles by Mark Fenwick

Mark Fenwick

Kyushu University - Graduate School of Law

Erik P. M. Vermeulen

Tilburg University - Department of Business Law; Signify (formerly known as Philips Lighting) - Legal Department; Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI); Kyushu University - Graduate School of Law

Date Written: August 14, 2016

Abstract

Seven “Corporate Venturing” Strategies to Foster Innovation tackles the question: What should companies do to accelerate innovation and remain relevant? Or, stated differently: What should companies do to avoid being disrupted by more agile and innovative startups? One answer is corporate venturing.

Corporate venturing is often understood as a corporation making an investment in external startups either directly (off the balance sheet through a corporate venturing unit) or indirectly (through a venture capital fund) for strategic and/or financial gain.

This kind of definition is limited, at least as a description of current “best practice” in corporate venturing. Based on the findings of an empirical review of the world’s most innovative companies’ venturing practices, we identified various other corporate venturing strategies that have been adopted. These strategies transform firms/corporations into open and inclusive “ecosystems” built, in part, around new forms of relationship with entrepreneurs, founders and startups. By “organizing-for-innovation” in this way, large firms give themselves the best opportunity of remaining relevant over the long-term and offer startups the best opportunity of successfully scaling.

Keywords: corporate finance, corporate venturing, corporate venture capital, ecosystems, entrepreneurship, innovation, networks, open innovation, organizations, startups, talent, theory of the firm, venture capital

JEL Classification: D2, D85, E22, G3, G34, K20, K22, L14, L22, L26, M13, M14, O31

Suggested Citation

Fenwick, Mark and Vermeulen, Erik P.M., Seven 'Corporate Venturing' Strategies to Foster Innovation (and Create an Environment for Long-Term Growth) (August 14, 2016). Lex Research Topics in Corporate Law & Economics Working Paper No. 2016-7, TILEC Discussion Paper No. 2016-023, Available at SSRN: https://ssrn.com/abstract=2823008 or http://dx.doi.org/10.2139/ssrn.2823008

Mark Fenwick

Kyushu University - Graduate School of Law ( email )

744 Motooka, Nishi-ku,
Fukuoka, Fukuoka 819-0395
Japan

Erik P.M. Vermeulen (Contact Author)

Tilburg University - Department of Business Law ( email )

Signify (formerly known as Philips Lighting) - Legal Department ( email )

Amstelplein 2
Amsterdam
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Kyushu University - Graduate School of Law ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan

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