How Corporations and Startups Are Redefining Corporate Venturing
The Mack Institute’s Corporate Venturing Report presents a data-driven analysis of how corporations are engaging with startups today. Based on a systematic review of the world’s 500 largest companies, it reveals a corporate venturing landscape defined by structured, mutually beneficial partnerships. These collaborations enable corporations and startups to access new technologies, build business ecosystems, and tackle complex challenges.
The report’s authors include Gary Dushnitsky, Professor of Strategy & Entrepreneurship, London Business School; Claudio Garcia, Senior Industry Fellow, Mack Institute; Serguei Netessine, Senior Vice Dean for Innovation and Global Initiatives, Wharton; and Valery Yakubovich, Executive Director, Mack Institute.
The companies mix and match eight key corporate venturing practices in pursuit of the most common corporate goals beyond financial gains.
Corporate Venture Capital (CVC)
Corporations leverage their financial resources, industry expertise, and market relationships to invest directly in startups to foster innovation, grow capital, access new markets, and gain competitive advantages.
Accelerators & Incubators
Corporations offer startups structured support and even initial investment in exchange for equity or partnership opportunities. Accelerators are time-bound, cohort-based initiatives focused on fast-tracking startups through mentorship, fundraising, and corporate connections. Incubators offer longer-term support and usually provide startups with more resources, such as workspace, technical infrastructure and deeper business advisory.
Venture Building
Corporations identify the domain of interest, and the startups are created, launched, and scaled either by an internal venture building team, or by an external party, such as a university or a standalone ‘venture studio.’
Venture Clienting
Corporations use fast, cost effective, and lower-risk pathways to test new technologies, bring them to markets, and capture value from innovation. Financial exposure is limited by structuring engagements as procurement contracts rather than equity investments, avoiding the risks associated with venture capital portfolios.
Mentorship
Corporate executives and their teams and partners provide guidance, knowledge, and connections to startup founders.
Business Service
Corporations customize their products and services to startups’ needs and financial constraints.
Workspace
Corporations create physical or virtual spaces for startups to work alongside corporate employees and external partners, encouraging idea exchange and collaboration.
Events
Corporations host or participate in startup targeting events such as hackathons, pitch competitions, demo days, or networking sessions.
Corporate Venturing by Practice
Percent of companies engaged in corporate venturing by practice.
Programs Activities
Corporate Venturing by Sector
Percent of companies engaged in corporate venturing practices by industry.
Programs Activities
Between 50% and 60% of corporations in each sector report engaging in CVC — a remarkable adoption rate for the most capital-intensive form of corporate venturing.
Venture Building by Sector
Percent of companies engaged in venture building by industry.
Venture Clienting by Sector
Percent of companies engaged in venture clienting by industry.
Venture clienting offers corporations a fast, cost-effective, and lower-risk pathway to test new technologies and capture value from innovation.
Key Takeaways
No One-Size-Fits-All Design
There’s no perfect formula for corporate venturing. The magic lies in how corporations tailor and bundle different practices into their venturing efforts to align with their specific contexts, cultures, and strategic objectives. For instance, CVC is a powerful tool for securing relationships with those developing transformative technologies. And events offer a cost-effective way to a first map of stakeholders in an eco-system. True success lies in designing comprehensive strategies that integrate multiple practices into a cohesive approach.
Emerging Tools
Companies explicitly address six key goals through corporate venturing practices. Among the more unexpected uses were initiatives aimed at nurturing Business Ecosystems, advancing DEI goals, and programs aimed at sustainability. It remains to be seen whether corporate venturing’s role in advancing sustainability and diversity goals will endure. However, the key takeaway is clear: corporate venturing is evolving beyond its original mandate, becoming a strategic tool for tackling a broader set of business challenges.
The Rise of Clienting
Venture clienting has emerged as a powerful extension of the corporate venturing toolkit. This practice turns procurement decisions into pivotal moments for collaboration, allowing corporations to adopt cutting-edge solutions while startups gain invaluable market validation and steady revenue. By aligning purchasing decisions with innovation strategies, companies can test and scale startup solutions that address their unique challenges while minimizing risk. In many ways, this practice underscores a more prominent trend: corporate venturing is evolving from a separate initiative into the way corporations think, act, and grow.
Growing Emphasis on Ecosystem Development
While historically corporate venturing was seen as a strategy to access and learn from the brightest technology star, nowadays some firms approach it as a strategy towards building a thriving constellation that will benefit their business ecosystem. By aligning venturing efforts with the needs of these emerging players, corporations create a dynamic environment where growth becomes interdependent and mutually reinforcing. The outcome is a symbiotic relationship that drives innovation and expands markets, positioning corporations as both creators and leaders of the ecosystems they inhabit.