Large corporations recognize the vast potential of working with startups, which has led to a boom in venture builders, venture clients, and corporate accelerators. These initiatives spur innovation, helping corporations innovate and evolve to stay competitive in a rapidly changing market.
According to Harvard Business Research, the number of corporate investments in startups tripled from 980 in 2013 to 2,795 in 2018, with their total value growing from $19 to $180 billion. Today, 75% of Fortune 100 companies have an internal venture capital arm, like a startup accelerator.
Corporations can benefit from accelerators in 5 different ways:
- Launching a program quickly and cost-effectively: by partnering with accelerators, corporations can quickly enter the acceleration business and adopt best practices developed by accelerators over years of operation.
- Enhancing deal flow: by accessing an accelerator’s marketing power and network.
- Staying up to date: by having access to an accelerator’s deal flow, they receive insight into the innovation pipeline in their market. Corporations have learned that competitors now often come from the startup world.
- Building an innovative corporate culture: by placing their corporate executives as mentors in the accelerator or by enabling their own corporate executives to innovate. In the latter case, the new product could be placed into a separate company that is then accelerated by the accelerator.
- Building a more innovative brand: by aligning with accelerators and their startups which have become symbols of innovation in the eyes of the public.
Corporations can partner with accelerators to access emerging talent pools, learn about innovative new technologies and practices, and diversify their existing investment portfolio.