Corporate Venture Building
Corporate venture building is an approach where a company creates and develops startups internally.
Corporate venture building is an approach where a company, often a large one, creates and develops startups internally. Instead of simply investing in external startups, the company uses its own resources, expertise, and infrastructure to launch new businesses, usually around strategic technologies or innovations. The goal is to create innovative solutions that can eventually be integrated into the parent company's activities or developed as independent entities.
How does corporate venture building work?
The corporate venture building process often starts by identifying opportunities in a sector or technology. Then, the company mobilizes internal resources (talent, technology, funding) to launch a new startup. These startups benefit from the support and resources of the parent company while maintaining the flexibility and agility of a young business.
Development phases according to the Selego methodology
You can find the complete methodology here: innovation.selego.co
To facilitate the financial management of a corporate venture project, Selego has identified 4 key phases:
Investigation Phase (2 months): This initial phase, before starting technical work, focuses on validating user needs. Indicative cost: around €15k.
Construction Phase (12 to 18 months): This stage involves quickly launching a first version of the product (MVP) to test its usefulness and assess the relevance of scaling. Required budget: at least 1 FTE + €250k to €500k per year.
Acceleration Phase (12 months): A period of strong growth after construction, often requiring temporary team reinforcement depending on objectives. Investment: at least 1 FTE + between €500k and €2M per year depending on complexity.
Sustainability Phase: Stabilization phase where costs normalize once the service is mature. This phase requires at least 40% internalization with an annual steady-state cost between €500k and €2M per year.
It's crucial to note that a recurring budget is essential to maintain a digital service. It would be unrealistic to believe that all costs can be planned in advance or that they will stop after launch. Digital services require ongoing maintenance and improvements to avoid obsolescence.
Concrete example of venture building
Imagine a large company specializing in energy that decides to launch an internal startup dedicated to renewable energy. Rather than simply investing in an existing startup, the company uses its expertise in energy infrastructure to develop its own solution internally. This new entity operates autonomously but benefits from the know-how and network of the parent company to grow quickly.
Why is corporate venture building advantageous?
Corporate venture building allows large companies to stay innovative by testing new ideas without disrupting their core activities. It also provides a way to diversify revenue and explore new markets. Additionally, by directly supporting the creation of startups, they retain better control over the development and strategic direction of projects.
Want to explore corporate venture building?
If you want to learn more about corporate venture building or how to implement it in your company, contact us. We would be happy to support you in this process.