Corporate Venture Building
Getting Real About Corporate Advantage: Moving Beyond the Myths
Corporates love to imagine and talk about their advantages. From the strength of their brands, to the scale of their distribution networks, and their vast customer bases. When large companies embark on new ventures, they often claim these assets as the secret sauce that will help bring success. But when it comes to actually unlocking these so-called advantages, especially in the early stages of venture design and build, the reality is often quite different.
Too frequently, those supposed advantages become frustratingly out of reach for the intrapreneurs and entrepreneurs working with them. Internal processes stall progress. Risk-averse gatekeepers throw up roadblocks. And the very resources that could make or break a new venture get tied up in corporate bureaucracy. It’s time for corporates to get real about their actual value-add to early-stage ventures — and to rethink how they can truly support the success of these ventures without becoming their biggest obstacle.
This article explores the disconnect between corporate claims and the reality of unlocking their advantage. We’ll also look at ways corporates can meaningfully contribute to early-stage ventures while avoiding the pitfalls that often turn their involvement into a disadvantage.
The Dilemma: Unlocking Corporate Advantage in Early-Stage Ventures
Corporations bring powerful assets to the table: big and trusted brand names, often global market access, proprietary technologies, and deep industry expertise. These advantages can, in theory, give new ventures an edge in crowded markets. However, in practice, during the early stages of venture design and build, these advantages often remain locked behind layers of corporate complexity.
Corporate Advantages: More Myth Than Reality?
Corporates enter new venture projects with the promise of resources, but what often happens in the early stages is that these promises don’t materialize. New ventures need speed, agility, and a willingness to take risks — traits that large organizations tend to lack when applying their traditional processes. And even when getting into the venturing mindset, they still find those very hard to implement.
Take, for example, the promise of using a corporation’s vast sales network. In theory, sales teams could help launch a new venture by opening doors to key customers. But in reality, sales reps are often hesitant to promote untested products, especially when they could be focusing on the core business, which has already been proven to deliver returns. They fear losing their customer’s trust, which is their most important asset. In addition, it is often also difficult to define new KPIs for the sales people in the early days of a venture and any efforts will take away from their ability to achieve their normal KPIs. This risk aversion stalls the venture’s ability to gain traction when it needs momentum the most.
For example, in a recent venture where we were looking to optimise industrial processes for factories in textile and F&B, the venture team was able to get LOIs with two sizable clients purely based on their own efforts. With that success in hand, they reached out to the mother corporate’s sales team to showcase their success and ask them for more introductions. No introductions followed in the short-term as the solution was too early-stage for them.
Similarly, the promise of leveraging internal talent or proprietary technology frequently hits a wall when faced with internal processes. Access to these resources is often bogged down by procurement policies, legal reviews, and corporate politics. For a venture that needs to operate at startup speed, this can be a death sentence.
We often take care of expert and equipment payments during a Venture Design phase, as typical corporate procurement would take 90+ days to onboard such new vendors. If left to their own devices, corporates would often massively delay any route-to-pilot for their ventures, which might kill the early trust the team has been able to create.
The result? The very corporate advantages that were supposed to be game-changers for the venture become liabilities.
Barriers to Unlocking Corporate Advantage
1. Risk-Averse Sales and Gatekeepers
Sales teams are among the first gatekeepers new ventures encounter. And while they have the potential to provide invaluable market access, they are also the most risk-averse stakeholders within the corporate structure. Sales representatives are measured by their ability to deliver consistent, predictable results, and a new venture — no matter how innovative — represents a risky, unpredictable proposition.
For the sales team, promoting an unproven product can feel like a gamble. If the product doesn’t deliver, they face the potential fallout from dissatisfied customers and missed sales targets. This reluctance often results in new ventures being sidelined, while the core business continues to take priority.
2. Inflexible Corporate Processes
Another major barrier is the rigidity of corporate processes. New ventures need rapid decision-making and flexibility, but corporates, especially large ones, are built for stability, not speed. When a new venture is trying to gain early traction, it can be slowed down or even derailed by internal processes that are simply too slow and too rigid.
For example, a corporate’s procurement process may require a lengthy approval chain before the venture can acquire new technology or hire talent. Legal and compliance teams, too, may insist on comprehensive risk assessments, delaying the venture’s ability to experiment with new business models or go to market quickly.
These bureaucratic delays frustrate venture teams and reduce the speed at which they can operate — often leading to missed opportunities.
3. Internal Competition
In some cases, new ventures are seen as direct competitors to existing business units. Even if the venture operates in a new or adjacent market, existing teams may view it as a threat to their budgets, customers, or internal prestige. This can lead to resistance from within the organization, making it even harder for the venture to access critical resources or gain internal support.
In a venture we built in the energy efficiency space, a business unit of the corporate partner intervened in one of our customer conversations, as he saw them as their target customer and wanted to take over the process. This cost the venture several weeks of wasted efforts.
4. Low Priority for Resources
New ventures often struggle to access the corporate’s best resources. Established business units usually get first dibs on top talent, cutting-edge technology, and customer relationships. New ventures are seen as lower priority, and they are frequently left with “fractional” access to resources that aren’t sufficient to move the venture forward at the necessary pace.
While corporates claim they will “support” the venture, what this often means in practice is partial or piecemeal support — access to overbooked talent or outdated technology. Even if great experts are accessible, they might not be available on a timeline relevant for the venture.
5. Fear of Cannibalizing the Core Business
Many corporates are hesitant to fully support ventures that could potentially disrupt their core business. Even if the venture targets a different customer segment or operates in an adjacent market, there is often an underlying fear that success could cannibalize existing revenue streams.
This fear of internal disruption can lead to half-hearted support, underfunding, or reluctance to fully leverage corporate assets for the venture’s success.
How Corporates Can Still Add Advantage in the Early Stages
Despite these barriers, corporates still have the potential to provide significant value to early-stage ventures. The key is to identify which corporate assets can be leveraged in ways that are fast, flexible, and focused on helping the venture move quickly through its early stages.
1. Advisory and Expertise
One of the most valuable contributions a corporate can make is advisory support from experienced executives. Corporates are full of seasoned professionals with deep industry knowledge, and providing access to these individuals can help venture teams navigate the complexities of their markets, identify potential pitfalls, and fine-tune their strategies.
Unlike formal corporate processes, advisory support can be agile and informal, allowing the venture team to gain insights quickly without being bogged down by approvals.
In a recent venture we were able to get fast support from senior technical experts that helped us interpret relevant observations at LOI customer factories and also advised the team on health & safety to operate inside factory environments.
2. Brand Endorsement
Another powerful tool corporates can offer is their brand. Even in its early stages, a new venture can benefit significantly from the endorsement of a well-established corporate name. A corporate’s brand lends credibility, helping the venture build trust with customers, partners, and investors.
While using the corporate brand doesn’t mean the venture should be viewed as part of the corporate entity, associating with a known name can open doors that would otherwise remain closed to a startup.
3. Fractional Resources
While full access to corporate resources may not always be feasible, corporates can still provide fractional resources that make a big difference in the early stages. This could mean offering limited access to technology, sales channels, or employees on a part-time basis.
For example, rather than assigning a full sales team to a new venture, a corporate might provide a small, dedicated group of salespeople who can work closely with the venture to test the market and build relationships with early customers.
4. Access to Networks
Corporates can also unlock value by providing access to their extensive networks. Whether it’s introductions to key customers, partners, or potential investors, these connections can help the venture establish critical relationships and gain early traction.
Avoiding the “Corporate Disadvantage”
While corporates have the potential to offer significant advantages, they must also take care not to become a hindrance to the venture’s success. Here are a few ways corporates can avoid turning their involvement into a disadvantage:
- Minimize Bureaucratic Delays: Create streamlined processes specifically for venture teams, allowing them to operate with the agility of a startup. This could involve setting up dedicated procurement and legal teams focused solely on supporting ventures.
- Foster Entrepreneurial Autonomy: Give venture teams the autonomy to make decisions quickly, without needing constant approvals from corporate leadership.
- Encourage Risk-Taking: Encourage a culture that tolerates experimentation and failure within the venture context. Corporates should view early failures as learning opportunities rather than reasons to pull back support.
- Set Clear Boundaries: Avoid imposing rigid corporate policies on the venture, especially those related to branding, product development, or sales strategy. Instead, allow the venture to operate independently within a flexible framework.
Strategic Timing for Unlocking Corporate Resources
It’s important to recognize that while corporate resources may not be fully unlocked during the design and build phases, they can be highly advantageous later when the venture is ready to scale. Corporates should focus on providing critical early-stage support — like advisory services and brand endorsement — during the venture’s infancy, while holding back more extensive resources for later-stage growth.
For example, once the venture reaches Series A or beyond, corporate sales channels, customer relationships, and marketing budgets can be fully utilized to drive rapid scaling. By phasing their involvement, corporates can ensure that they add value at the right time, rather than overwhelming the venture too early.
Several ventures we helped to build received significant corporate support such as SPVs for debt financing assets and significant customer leads after their Series A, once the volumes reach a level corporate start to understand and the product is so solid that even risk-averse sales staff will open doors.
Conclusion: A Realistic Approach to Corporate Advantage
The promise of corporate advantage is real, but it’s often misunderstood. In the early stages of venture design and build, corporate assets are hard to unlock, and internal processes can easily stifle progress. However, by taking a more focused and flexible approach, corporates can provide meaningful support without becoming a roadblock.
By offering advisory expertise, brand endorsement, fractional resources, and access to networks, corporates can give new ventures the lift they need — while minimizing the risks associated with bureaucratic delays and risk-averse decision-making.
For corporate leaders, the key to unlocking real advantage lies in understanding the unique needs of early-stage ventures and tailoring support accordingly. By getting real about their limitations and focusing on where they can truly add value, corporates can become a powerful force for venture success. And as the venture grows, Series A and beyond, corporates can unlock their more substantial assets to accelerate the venture’s scaling and market penetration.
We are pleased to be an appointed venture studio of EDB’s Corporate Venture Launchpad 3.0 — a corporate venturing programme by EDB New Ventures, designed to empower companies to drive deeper innovation through venture creation and startup partnerships.
You can also find out more on our website.
Authors:
Sebastian Mueller, Founding Partner at MING Labs
Toi Ngee Tan, Founding Partner at Wright Partners
