Start-ups bring innovation and challenges to corporate investors

Panellists on the Seven Lies of Corporate Venturing session added that integrating a start-up can also shake up a large company’s internal practices for the better, with potential benefits going beyond acquiring new technologies in areas such as 5G, AI, IoT, cloud computing and cybersecurity.

“We need to transform. Start-ups really help us do that … [they] can disrupt and refresh our practices,” said Marc Rennard, chairman and CEO of Orange Digital Ventures.

“Working with a start-up requires a lot of cultural change,” added Karolina Korth, chief digital officer, Mobility, Siemens. And successful relationship with a start-up, she explained, can help promote “the digital change you want”.

Not all large technology companies’ approaches to developing relationships with start-ups are the same, noted Rennard. Orange Digital Ventures describes itself as an early-stage, risk-oriented corporate fund, with 16 hubs in multiple locations, including Senegal and London.

“Orange can enter at a very early stage and help with training, location and very limited funding,” said Rennard. “It is hugely important to identify start-ups at very early stages. When they are good there is a lot of competition.”

But whatever a company’s approach, both speakers agreed that there are few quick measurements of success.

“It may take five to ten years to make an exit and for an investment to prove successful,” Rennard said.

And Korth also cautioned against measuring the success of working with start-ups purely in monetary terms.

“The return on investment is not necessarily financial. It could be higher motivation, a better employee retention rate, or the ability to attract new profiles,” said Korth.