How Corporate Venturing Adds Value to Open Innovation

Startups play an increasingly important role in the corporate innovation process. With the number and quality of startups increasing each year, incumbent organizations are trying different ways to collaborate with these new ventures. Ranging from incubators to nurture internal development, to establishing a venture capital fund to invest in promising startups, to co-creation partnerships-companies have a wide range of instruments at their disposal. Moreover, when developing a corporate venturing strategy, firms also need to consider their strategic objectives: are they searching for new innovations to be incorporated into the innovation funnel, or is a collaboration with startups merely interesting to develop the innovation ecosystem? This chapter discusses the different instruments for corporate venturing that firms have at their disposal and their fit with different venturing approaches. The chapter concludes with a number of guiding principles to managers embracing corporate venturing as part of their open innovation strategy.