Sunne Justice sat across from me, explaining her company mission, and her interest in creating a conscious cloud technology business.
She had a startup business that had successfully raised 1.5 millions dollars for a cloud technology venture.
Listening, I was amazed, “How could a business, 5 years in the making; one that still had their product in beta (a type of tech trial basis), managed to raise so much venture capital?” “Of course,” I thought. “As an experienced corporate CEO, it must be easy for Sunne, to raise the money. She had the contacts.”
But after a lot of research, some digging and a few interviews, I realized that many startups have found the venture capital they needed, and without too much of an effort; even without having too many corporate contacts or finance experience.
They just knew where to look.
If you have a great idea or an existing start-up that needs money to grow, you can borrow from friends and family but a better and more lucrative option, may be to find venture capital in the corporate world.
Where Do I Find The Kind of Capital I Need?
A new resource, just recently on the rise is the corporate world. More and more large corporations seem to be opening up venture capital funding departments.
“Wait a minute! Wasn’t that something they tried in the late 1990s?”
It is true. Many financial institutions and corporations tried their hand at venture capital investments and lost their hats in the process. But that was a time when corporations where only looking at the bottom line of a start-up. Now their vision is more global. They see start-ups as an opportunity for innovation.
Venture capital funding has decreased since the late 1990s. But if you have a solid business plan, a good product or idea you can still find venture capital investors. They are everywhere and continually increasing. In fact, now multinational companies are venturing into the startup world.
The Big Guns
Yes, that’s right. Companies like General Motors, American Express, Verizon, Google and PepsiCo, are just a few of the blue chip companies that have fully functional venture capital departments.
What’s The Deal? Why are large corporations implementing venture capital funding departments?
There are several reasons for this. Some multinational corporations are looking to get a piece of the startup action… but more likely, many of these corporations see startups as a viable research and development solution.
According to the New York Times, companies like General Motors, have investors based in their research labs. Large corporations across the globe are investing more than $20 billion in startups – and that’s no small chunk of change.
The Startup Advantage
Where other types of investors could be put off by certain startup investments because of a lack of real profit, large corporations see the same start-up venture as an opportunity. Blue-chip companies turned venture capitalists seem to be less concerned with profits, than they are with future innovative ideas.
Corporations are often restricted by regulations and by internal policy. This impedes their ability to be innovative. So instead their idea is to share with small, innovative businesses that are outside their own corporate enterprise.
For the large corporation, a promising startup could be a way to stay ahead of the competition; a way of innovating their existing products and of delivering superior value to their stakeholders.
The Result
The growth of successful startups is making established corporations reconsider new business opportunities and the way they search for innovation. Today, this means offering corporate venture capital, alliances, licenses and joint development. For them, venture capital departments have become a useful tool which they use to stimulate innovation.
For startups, this new interest from large corporations is great news. It means more resources for their ideas, products and inventions. It means access to funds they couldn’t otherwise find, even if they find funding from friends and family. When looking for funds larger than a few thousand dollars, this is certainly a funding option worth considering.
Finding These Venture Capitalists
Before looking for corporate venture capitalists, you must make sure everything is in order. You need a highly-detailed business plan. You need guidance from experts in business plan development; experienced consultants who know what corporate venture capital departments look for; those who know what corporate investors to point you toward.
