Engaging Early Stage: 4 Ways Corporations Can Support the Startup Ecosystem

We call Minneapolis-Saint Paul and the broader region a headquarters economy. We are home to Fortune 500 companies, private industry leaders like Cargill and Medtronic, and more than 50 companies that bring in $1Bn+ in revenue per year. It makes us unique — so unique that Bread and Butter has built a thesis around it.

This aspect of our economy was also the driver for a project I have been leading for Forge North. I spent the last several months interviewing several corporate leaders as I wrote the Enterprise Playbook, a handbook that offers a framework for Minnesota’s corporations to contribute to making this the #1 startup ecosystem in the nation.

One key learning is that many corporations feel the MSP startup ecosystem is too nascent to work with; they typically look to later-stage startups (or scale-ups) as a more evident and attractive fit for partnerships. To increase the strength of MSP entrepreneurship, corporations need to take a longer-term view of the ecosystem by supporting emerging startups earlier than they have done previously. Although these startup ventures may not be ready for later stage funding, there is value to engaging with the early founders in our community.

And what about that vast majority of founders and companies in the ecosystem that are in seed, pre-seed, or even just idea stage? Does living in a headquarters economy make a difference for those founders?

It can.

As more and more corporations in our region choose to engage with the early stage ecosystem, we will see benefits that ripple throughout the economy and lead to additional and stronger growth stage companies. Today, I’m highlighting a few things that large enterprises can do (beyond direct investing or signing commercial deals) that can impact our early stage community.

Determine Internal Goals and Capacity when it comes to Accelerators/Incubators

Partnering with accelerators and incubators allows corporations to engage senior leadership, uncover new technologies and innovations, and establish a diverse investment portfolio. In the startup world, an accelerator is a fixed-term, cohort-based program that likely involves the exchange of equity with a startup, where the startup is receiving valuable education, investor introductions, and mentorship from the program. An incubator is similar but does not always involve an equity exchange and sometimes has a more extended time period.

The first step in this process is to talk with partners — whether they’re organizations that run programs or talent that can be brought in-house. Partnership is a broad term here — it could refer to everything from having a national organization like Techstars run a collaborative accelerator with you to partnering with a local organization to sponsor their already standing incubator. These programs are vital for the ecosystem as they offer early stage companies tremendous guidance and network connections.

There is also the opportunity to build up internal capacity for recruiting and running an accelerator — a great local example is Target Accelerators. Regardless of the form that your involvement takes, have early discussions to make sure you’re open to potential collaborations, proof of concepts, and partnerships with the startups going through the accelerator/incubator and work internally to make these happen.

Develop Process Around Brand Partnership with Emerging Companies

Partnerships between corporations and startups can lead to outsized outcomes for both parties, and partnerships come in all shapes and sizes. For example, consider how teaming up with a startup could be a win-win — from physical product distribution to technical integrations to brand partnerships.

A brand partnership could help both parties reach new audiences quickly. For example, a large corporation looking to reach new moms may consider partnering with leading content providers in the blogosphere or maternal health companies to reach these targeted audiences quickly.

It’s helpful to have identified the path to making partnerships with early or still growing companies easy and clear throughout your corporation.

Get Creative When It Comes to Team Perks

Exposure to entrepreneurship and entrepreneurs can allow corporate team members a chance to soak up energy and be pushed to think differently within their current roles.

One idea of where to start — experiment with how the startup ecosystem can play into your talent development and total rewards programs! For example, there are many opportunities in our region and state for employees of your company to become active angel investors in local startups. You can engage with Mickayla Rosard of Groove Capital, who is leading a Forge North initiative to activate more angel investors throughout our region. Mickayla and her team can help bring in experienced local experts to speak about angel investing over a lunch-and-learn, a special and unique opportunity for your local team members.

Promote Startup Ecosystem Internally

One of the first steps to getting your talent engaged with the local ecosystem is to take advantage of mentorship, investment and advisement opportunities is to help them figure out where to start. Promoting local events that feature the ecosystem or internally trumpeting when your corporation partners with local groups can be a great way to get your team interested, excited and aware.

Think about having your internal communications curate a list of outlets that commonly cover or share news on the MSP ecosystem like StartMN, Tech.MN, Minneinno and more. Groups like AURI and Medical Alley Association also curate industry-specific startup news.

Not only do startups and entrepreneurial support organizations love audiences and shares of their work, but numerous companies would love to get in front of crowds in general as they build consumer solutions. Share internally with employees that a locally based sauce is now available for purchase at their neighborhood grocery store, or give them the chance to insure their sneaker collection, or help spread the word that they can order lunch delivered by a robot.

Bring the best of the entrepreneurial ecosystem to your company, infuse your culture with it, and encourage your employees to share some of your internal culture with the startup community.

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These are just a few ideas of how corporations can engage with the early stage startup ecosystem in their backyard; you can download the full Forge North Enterprise Playbook for more.

We’ve got a special advantage here in MSP — living in a headquarters economy can certainly influence a startup and the overall startup ecosystem’s trajectory and make a difference. And with your help, it will.