In order for corporates to build relationships with DeepTech startups, they must be aware of a series of indicators that will allow them to get investment returns accordingly.
However, before jumping into detailing the key KPIs, there are a series of questions that corporate partners must address:
(1) What are our objectives with regard to Corporate Venture Capital (CVC)? It depends whether the organization is strategically-oriented (focused on developing a strategic goal) or financially-oriented (focused on the investment return).
(2) Who defines search fields within the corporation? Usually defined by the corporate center or the company’s business unit.
(3) Which entity within the corporate organizational structure should manage the CVC unit? Usually managed under the strategy department or R&D department.
(4) How many deals do we want to source?
(5) Can CVC be a way to prepare for future acquisitions?
(6) When and how fast should we integrate a startup within the core business?
(7) Do we have the necessary internal capabilities and market experience to support our collaboration platform or should collaboration proceed externally?
(8) Which function should oversee collaboration with the startups?
(9) Should we have a dedicated physical place (coworking space)?
Answering these questions can help corporates set up a clear strategy to collaborate with startups and build agile strategies to adapt their approach in an agile way to work with DeepTech startups. In order for corporates to adopt this agile environment and involve different business units, they should focus on agility and on engaging relevant people in top management, project management and operational levels. The optimal approach to take depends on the organization, its objectives as well as the number and profile of startups the company wants to work with.
Until now, corporates have struggled to collaborate effectively with startups, as these latter required different processes and KPIs to implement. However, the right balance between financial and strategic metrics depends on the type of collaboration and should reflect the startup’s maturity. This collaboration cannot be 100% financial as such an orientation would diminish/kill the innovation objective and conversely it cannot be 100% strategic as financial impact must also be considered at some point to ensure a successful collaboration for both parties.
An example of balance between financial and strategic metrics can be found in the graphic below:
Therefore, KPIs should be clear and corporates should share the reporting with the startup and within their own company through regular communication.
Additionally, corporates should adapt their KPIs to track long-term results depending on their overall portfolio approach. To implement this new strategy, organizations must foster the right culture and mindset to efficiently work with startups in order to be considered as a valuable partner in the long run.
To learn more about building DeepTech ecosystems, check out the previous articles from this series:
Part 1 – Challenges
Part 2 – The Pathway
Part 3 – Startup Partnerships
Part 4 – Corporate Partnerships
More articles from this series are coming soon so stay tuned for even more insights!
Cover photo by Sean Pollock via Unsplash