The startup event of the year, Slush, was last week and that meant it was also time for our official Slush side event: Corporate Venture Capital.
Together with Helsinki Business Hub, Mawsonia and Global Corporate Venturing we got together the brightest of the CVCs from all over the world. And thanks to the great speakers and our amazing attendees we got an interesting peek into what’s in the minds of the CVC professionals all over the world.
Corporate Venture Capital is here to stay
Corporate venture capital has been on the rise. But lately, some have started questioning whether it’s just a boom that is going to die soon.
But that’s definitely not the message we got from the event.
The keynotes talked about growth and potential that is just starting to be discovered, and the roundtable discussion and our interviews made that picture even clearer. The general consensus seemed to be: CVC is definitely not just a boom. It will probably slow down a bit in the future, but not die. Some even wondered if we even have seen its peak yet.
All in all, Corporate Venture Capital is here to stay.
CVC activities are a key for corporations’ survival
Nowadays it’s becoming more and more difficult to think about an industry that is not being disrupted. Big corporations are turning to CVC to survive. Like they did in the last recession too. Corporate venture capital is a tool for survival.
“Any business nowadays needs to be focused on survival. Large corporations are prioritizing the search for new technologies, new business models, and so on. And CVC is a very effective way of doing that.”
– Tom Whitehouse, Contributing Editor, Global Corporate Venturing
Samuli Sirén, managing director of Redstone also added:
“Technological development is so fast that no corporation can create all of the R&D in-house and they have to get external impulse. And the most effective way is to invest in independent startups and support them financially and then have access to them. This then really brings in the best deals and teams and access to the best technology.”
Ad hoc is not the way to work with startups
We also gave a peak into our recent study on corporations.
18% of the companies believe innovations come from startups. While that is not so surprising, after all, startups are known for their innovativeness, it was interesting that 45% of companies believe the best innovations come from cooperation with startups.
We obviously believe in the magic of cooperation between startups and corporations, but it was great to hear that the majority of the corporations believe so too. That collaboration is where the real magic happens.
But the problem is that the most common approach to collaborating with startups is ad hoc. I say problem because it shows also in the results. Or should I say lack of results.
25% of the respondents said the cooperation with startups failed because it wasn’t aligned with the company’s strategy and 14% of the respondents admitted they just don’t know how to work with startups. The know-how of working with startups, the completely different species, is missing.
The same story was also heard in the roundtable and panel discussions
Corporations struggle with early-stage investments because they don’t have the processes that are needed to succeed. Ad hoc just doesn’t work.
As Juho Isola from Taviq, the startups’ side said:
“You need to know how to use startups as a tool and not just invest randomly in them. Otherwise, you’ll just get a mess as a result”.
When a corporation partner doesn’t know how to collaborate with startups it is a problem also for the startups. Corporations are known to be able to stifle even a mid-sized company, let alone a young startup.
Having the right processes and knowhow benefit both the collaborating corporation and the startup(s).
Startups aren’t the only ones with amazing ideas. But they are the fastest at executing them
Startups have amazing ideas. But so do corporations. It just takes longer for them to make them into reality. What corporations can do in months, if not even years, startups can do even in a week. And that is a key thing for corporations to understand when they are looking into investing in startups.
As Ewan MacLeod, the Chief Digital Officer at Nordea bank said in his keynote:
“You can’t ignore a startup just because you already have the same idea as they do. Because guess what: they are going to make it live much faster than a corporation ever can.
Thus corporations need to forget the whole ‘we are already thinking about doing it’ excuse. You’re just thinking. Not doing. And in the end, doing is all that really matters.”
The future of CVC in Finland future looks bright
As the event was just before Finland’s 100 birthday, we were of course also curious to hear what the pros had to say about Finland as a corporate venture capital location. Lucky for us, it seems like the future is bright.
In proportion to its market size, Finland is dominating in CVC in the Nordics. According to the pros, our innovativeness, track records in digital and connectivity and deep technical knowledge, along with phenomena like Slush, make Finland a very attractive place for CVC activities. And they expect it to only get better.
It was our first time throwing an event specially for CVC professionals. But it definitely won’t be our last; the event exceeded our expectations ten folds! Next time we definitely need a bigger venue…
Thank you to everyone who came and see you next year!