Monday, June 17, 2024

White paper cites role of corporate venture building in business innovation

The Embiggen Group has released a white paper explaining the power of corporate venture building (CVB) as an organic growth strategy that empowers corporations to capture exponential long-term growth.

The paper, titled “Corporate Venture Building: The Next Era of Corporate Innovation”, was released this month.

Embiggen is a corporate venturing group that partners with organizations to build, scale, and invest in new digital ventures at startup speed through CVB and venture capital-as-a-service (VCaaS).

“Mergers and acquisitions, venture capital and corporate venture building all involve a significant investment from a venturing organization. But historically, corporate venture building has provided greater returns than M&A and venture capital. This is what makes venture building the most efficient choice amongst the three growth strategies,” Rolan Marco Garcia, Embiggen founding CEO and managing partner, said.

Also known as new business building, CVB is an innovation strategy where corporations build new ventures in markets and industries that their core business doesn’t currently operate in or service.

Newly built ventures create new revenue streams for an organization while operating independently of the core business. They also allow corporations to access untapped markets, cater to consumers’ unsolved problems, and diversify their offerings.

“Research has shown that corporate-backed and built startups have a one in eight chance of succeeding. This success rate is significantly greater than the one in five hundred success rate of typical startups,” Garcia said.

The paper further quoted a McKinsey & Co. study which revealed that most business leaders predict around half of their company’s revenues will come from currently undeveloped products, services, or businesses by 2026.

It is then no wonder why eight of the ten largest companies in the world are serial venture builders, having built and launched at least five  new ventures each in the last two decades, the paper said.

CVB owes this success rate to the combination of the vast resources, highly skilled talent, and wide network that corporations possess with the agile mindset of startups. The white paper goes into more detail about the rationale for diving into CVB and the other benefits CVB brings to corporations.

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