Published in


The Ultimate Corporate Co-Creation Tool: Venture Building

At CREATORS, we’ve said for years that the most transformational innovation activities inside large organizations are those which combine both internal and open innovation efforts. In the corporate innovation journey, such activities are usually created only once the company went through digital transformation and has started various internal and external innovation projects. Combining these worlds is the ultimate innovation maturity, but it’s not for everyone and not always effective. Read on to see whether venture building is the right tool for your organization.

What is a Venture Builder (a.k.a. startup studio, company builder etc.)?

Venture builder is a fairly new concept that proposes a structured and intentional development of a company in a “controlled” environment and usually with more ventures being built at the same time. The idea behind such program says that you can test multiple company ideas in short and effective batches, thus making it easier to potentially come up with the successful startup. Since 99% of startups globally fail, creating a program in which the odds against you can be (slightly) minimized is a compelling scenario.

Since 2008, more than 4B$ have been raised by venture builders around the world, the majority of which work like early stage VC funds, internally financing venture building programs. These models have been believed to be an interesting way to create a new deal flow for VCs and have since been adopted by many VCs (e.g. Entrepreneur First, Team8, Techstars Studio, Joy Ventures with our proprietary Rapid Venture Builder etc.).

Since 2011, venture builders have contributed to creating around 15% companies around the world. At the beginning of 2019, the biggest venture builder in the world was the Silicon Valley-based Venture Studio Collective.

In the recent years, more and more corporations look into the venture building as a way to create new products and spin-offs. The results have been mixed: although the model seems to work well for any type of organizations, corporates have not been very successful with building really GOOD ventures, they’ve had more success with incremental improvements to their existing business. More information about it later in this blog.

Venture builders usually use the following methodology: They start with the vertical or industry selection or they narrow down the scope of the batch’s interest, then they form teams, ideate, validate their ideas and test them. Once they come up with an interesting solution, they prepare the Go-To-Market strategy (GTM) and they start growing the product and the company. This process can take anywhere from 3 months to 1,5 years.

Why is “Venture Building” a Thing?

Venture building was started by the VC world wanting to answer market needs with technologies that were not necessarily developed yet. There was a market gap — and a great opportunity — to invest in your own idea that you have validated with the market. Later on, corporates and other organizations started exploring venture building as a way to either boost internal product building or develop innovation ecosystems.

The venture building business for the VCs was a matter of a risk preference: while traditional VC models need few exceptional returns, venture building seems to offer a less risky alternative with a smaller funding commitment and a better control over the venture in its critical, early stages. Even if the created venture is unsuccessful, the ability to pivot or redistribute resources makes venture building less capital-intensive.

If we look at the corporate venture building models, the fact that the resources can be used again and that venture creation provides a great learning opportunity for internal teams is even more valuable. Corporate venture builders can re-use IP, teams, technologies and simultaneously build a strong core for their internal innovation efforts.

There are a few models for venture building, depending on where the team members come from:

- Venture building inside the company or a VC fund with in-house team members

- Venture building with external innovators (usually entrepreneurs) joining to create their own venture and supported in their operations by the company/VC fund

- Venture building in a “mixed” setting, where teams are both scouted internally and externally to create a blend of talent and experience. In these cases, venture building becomes a “mixed” innovation tool (internal-open innovation tool).

Obviously, there is no one-size-fits-all and each of these models can be relevant and successful depending on specific needs of the organization. However, the “mixed” model is the most difficult to master (yet could bring the most profound results for corporations if done well). The in-house venture building is by far the most common among VC funds, whereas venture builders for external innovators are more common among corporations.

Why Should You (Not) Create a Venture Builder?

If you are a corporation considering venture building activities, make sure you consider the following pros and cons. Especially, decide whether your company is ready for a high-intensity, advanced innovation project that goes deep into the company structure and require some focus and a lot of support for the entrepreneurs. You can see our article about Corporate Innovation Maturity (LINK HERE) to decide where you are in the Innovation Maturity Spectrum. Another good question to ask is whether you have undergone a successful digital transformation (you can read more about it HERE). Overall, venture building is most suitable for those organizations who are experienced in their innovation activities.

One of the most important benefits of corporate venture building is that it fosters the internal innovation culture of the organization. Similarly, it creates various products and approaches that can be recycled or utilized for a variety of projects, e.g. if the venture does not work out, there is always an option to move the resources elsewhere and use them again.

Venture building seems to be more relevant to those industries that do not require heavy resources to create relevant technology. In such cases, venture building is a good way to expand the product portfolio internally as opposed to scouting it outside the organization.

For those organizations who are heavy on bureaucracy, venture building offers a way to create new products and businesses quicker and with less red tape. This is because very often these new ventures operate as separate entities and have a lot of operational freedom to move quicker than the rest of the organization.

When it comes to major cons, I’d say that those organizations that are still early on in their digital transformation journey should probably test waters first with less ambitious activities and then move to venture building with a bit more experience.

Also, venture building is probably more suitable for creating ideas that are not unicorn-like, but rather easier to execute and build than disruptive, ground-breaking technologies. This is the reason why mid-size companies may find this model attractive as well.

One more, common mistake is hiring consulting companies to create corporate venture builders without enough know-how and experience. A lot of money can be wasted on such models that require a corporation to pay the double price for operating the venture builders AND financing consultants who learn about the model on the job. Don’t get me wrong: employing experience innovation experts is often crucial to venture builders’ success. But these consultants should definitely have a demonstrated understanding of venture building and not only possess big marketing budgets to sell you on partnering with them.

Overall, venture building activities may be extremely effective but have a higher risk of failure, so be prepared to build-test-measure and then adjust the model based on your lessons learned.


There are some great examples of companies that build ventures well. Usually, these companies put enough focus and budget to crack the challenging model and get the best out of it. Otherwise, they just create a nice PR gimmick with a mediocre result that has not been worth the organization’s time and effort.

My favorite examples include Google (whom I’ve shared in my last blogpost linked HERE: needs a link), Sompo — a Japanese insurance conglomerate active also in Israel, Silicon Valley and other high-intensity innovation ecosystem, the UK-based VC-company Entrepreneur First that takes promising graduates from top universities and gives them time and resources to build ventures, as well as our Rapid Venture Builder that we’ve created for Joy Ventures (you can read more about the Rapid Venture Builder HERE) in a blogpost created by my colleague Inbal Elazar).

Whatever you decide to create during your corporate innovation journey, make sure you have clear goals and feasible KPIs put in place to measure the activity’s relevance, but also give it enough time to allow for innovation to flourish. Corporate innovation takes some time and it’s too easy to write a great program off after a few months only because we do not yet see the transformation it brings to the organization.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store