Article
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30.5.2023

Unlocking Advantage

Ryan Larcom
Director, High Alpha Innovation
Kaitlin Gawkins
Senior Analyst, High Alpha Innovation

High Alpha Innovation was created with the assertion that the success of the world’s leading corporations will be determined by the quality and quantity of their engagement with startups. As corporations have grown in their desire to partner with startups, Corporate Innovation teams have focused on competencies that increase the quantity of those relationships – via functions such as external innovation scouts, CVCs, and venture builders. Many corporations who have increased their capacity for startup partnerships still struggle to extract value from those relationships. So how can corporations better execute on startup partnerships? We assert that Innovation teams need to be placing a greater emphasis on the quality of those partnerships, and share the five roles needed to increase the likelihood of successful startup-corporate partnership outcomes.

While Building Quantity of Startup Relationships… 

Corporations are looking to enable transformative growth through startup partnership. This is a trend we’ve been witnessing for a while, and it shows no signs of stopping. 

In a recent survey by InnoLead, nearly 70% of corporate respondents said they expect their level of startup engagement to increase in 2023, compared with 2022. ‍

As a result of this emerging exuberance for startup engagement, Corporate Innovation teams’ have been focused on exponentially increasing the quantity of startup relationships by establishing internal functions with the explicit objectives of partner, invest, and/or build:

  • Partner: Business Units dedicate external innovation scouts to identify partnership opportunities with existing startups that could be directly accretive to the business through channel partnerships, co-branding, or co-selling.
  • Invest: Corporate Venture Capitalists invest in existing startups in the hopes of forging strategic relationships that could lead to new channel partnerships, future acquisitions, or venture-scale financial outcomes. Between 2013 to 2019, there was a 32% YOY growth in CVC Investment; three-fourths of Fortune 100 Companies currently have venture divisions (McKinsey). 
  • Build: Increasingly, Corporate Venture Builders are designing and launching net-new startups for similar strategic reasons as CVCs, but with the explicit intent of building to address market gaps. High Alpha Innovation partners with the world’s leading organizations to co-create advantaged startups.
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Building out the above structures to partner with startups is a worthy activity. However, the number of startups that a corporation engages with does not directly correlate with the quality of those engagements…

“According to BCG research conducted in Europe, 45% of corporates and 55% of startups are “very dissatisfied” or “somewhat dissatisfied” with their partnerships.” (BCG)

“The vast majority [of corporations engaging with startups] see less than 25% of their initial pilots with startups scale into solutions that can be taken to market.” (500 Startups) 

Failed startup partnerships signal to the market that the corporation is not ready to engage with startups… and startups take notice and stay away. Thus, it is essential that corporate innovation teams focus on quality as much as quantity, by optimizing for the creation of two-way value within the relationship. 

…Increase Focus on Quality Interactions

So what does “quality” of startup engagement mean? Like all relationships, value must flow in both directions. Startups enter into corporate partnerships in the hopes of being conferred some degree of advantage, such as product development support, pilot program metrics, or customer introductions. Likewise, corporations engage with startups to access a range of strategic and financial benefits, such as access to new customer groups or new technologies, or new revenue streams. Quality, then, can be defined by the degree to which the relationship unlocks desired advantages, addresses immediate business needs, and generates meaningful learnings.

As Corporate Innovation teams are responsible for the quantity of startup relationships, it only follows that they must also be responsible for the quality of those relationships. In order to do so, the Corporate Innovation team must establish the organization’s startup strategy and work cross-functionally with the business to align on the learnings, business priorities, and advantages that the business can provide. Once established, it is incumbent on the Corporate Innovation team to provide the blocking-and-tackling required to meet these objectives.

Portfolio management is the key to success

Scaled corporations are optimized for sustainably achieving the “core business’” objectives, so achieving and maintaining a successful corporate-startup partnership – which often falls into an “adjacency” – is no small feat. Thus it is essential for Corporate Innovation teams to establish a group of internal stakeholders for maintaining relationships with the same degree of care as they do for entering those relationships.

Based on our experience working with dozens of startups and corporations, we’ve compiled the five (5) stakeholders that should exist on every Corporate Innovation team to increase the quality and success of startup partnerships:

  1. The Portfolio Manager

    Before seeking out any startup collaborations, you need to carefully identify your main objectives and reflect upon your internal capacity and process for working with startups. (500 Startups)

    • In a previous article, we discussed how taking a portfolio approach to startup engagement increases the chances that a corporation is able to capture transformative business opportunities. The portfolio manager is responsible for overseeing this effort, by viewing the portfolio of startup relationships in context with the corporation’s total innovation activities (including R&D and M&A). This senior innovation leader gauges portfolio health through metrics like total portfolio value growth, new rounds of funding closed, startup ARR growth, and total financial + strategic contributions. By using this zoomed-out lens, the portfolio manager is able to identify patterns and generate learnings for continual improvement. If the portfolio is struggling, they look for systems-level fixes. And if individual startups struggle, they activate senior business leaders and innovation team members to remove roadblocks.

  2. The Board Member

    Getting advice, connections, and industry-specific help from a major corporation is a way to differentiate and attract the best and brightest talent. (500 Startups)

    • When investing in a startup, it is common to request a board director or observer seat so that the corporation may have a “voice in the room” for critical governance and fundraising discussions. This individual should be a seasoned operator, ideally with startup experience, who understands startup governance and can be a help to early-stage CEOs through market access, subject-matter expertise, and/or talent recruiting. This leader’s job is to ensure that the corporation is aware of material changes in the business and is prepared to respond when necessary. While they never discuss the needs of “corporation as customer” in the boardroom, they do monitor to ensure that the startup is getting what it needs from the corporation - and intervene with the Portfolio Manager and Customer Advocate when roadblocks arise.

  3. The Executive Sponsor / Customer Advocater

    Aside from revenue, startups identify marketing exposure or connection to a corporation’s clients as the most compelling reason to work with a corporation. (500 Startups)

    • A mid-to-senior level business leader, the executive sponsor is the individual whose line-of-business directly benefits from the startup relationship. Unlocking the corporate advantage of scale and experience is this leader’s way of making good on the promise of two-way value creation. The executive sponsor provides a budget for a proof-of-concept and metrics of success for signing an ongoing customer agreement. Further, they create buy-in from the organization to use the product and provide regular feedback, empower sales teams in co-selling efforts, and engage marketing teams with the ROI metrics for effective case studies. By enabling the startup to succeed and promoting a culture of innovation, they also create opportunities for transformational growth in their own line-of-business.

  4. The Co-Pilot

    Corporations identified more than 10 departments that are involved in startup deals. To keep startup engagements on track, corporations need to align stakeholders, objectives, and resources early and often. (500 Startups)

    • In the fast-paced world of tech, startups must leverage their strengths to outpace the competition. Corporate partners have unique assets to contribute to startups, which can provide competitive advantage. The key is finding a way to identify and package those advantages and offer them as a service to portfolio startups, in as smooth and seamless a way as possible. The Co-Pilot is a mid-level corporate innovation employee who has board experience and relationships across the company which they can leverage on a moment’s notice to support the portfolio of startups. Acting as a sherpa and a translator, this person builds and manages the startup’s “support team” of users, buyers, and integrators tailored to the unique needs of the startup. By bridging the gap between the corporation and startup, they have the power to unlock the various opportunities and advantages that come with the relationship.

  5. Implementation Specialist

    In a survey of 500 Startups accelerator alumni, startups identified the most common barrier to working with corporations as being a slow procurement and contracting process. (500 Startups)

    • The corporation’s core business has been optimized for stability and incremental growth, so it is disrupted – and pushes back – when a startup partnership is offered. This is because Legal and Procurement teams lack “fast track” processes to engage on startup timelines, IT and Cybersecurity teams lack “sandboxes'' where startups can safely deploy an MVP for testing without having to be SOC-2 compliant or have >$10M in cybersecurity insurance, and Sales and Marketing teams lack the bandwidth and mindset to consider how running a single experiment with a startup could benefit both organizations. The implementation specialist serves as the point of contact for each department’s enablement of a startup relationship, clearing the way for startups to efficiently proceed through these crucial stages. By focusing on the goal of establishing the startup as a vendor as quickly as possible, they work to ensure value is able to be achieved by both parties in a timely manner.


At High Alpha Innovation, we enable corporations to develop their portfolio management skills through the applied practice of venture building. As the most trusted venture partner for corporations, we pair our proven playbook with a deep understanding of what it means to innovate within the corporate structure, enabling corporate innovation teams to learn through action via “live fire” test situations with the startups we co-design. 

If you’re interested in learning more or building with us, please reach out at info@highalphainno.com.

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