Venture Clienting in Corporate Practice: What type of Established Companies are Using the Venture Client Model?

Abstract

Start-ups have become a pillar of EC' open innovation initiatives. With the aim of accessing start-up innovation, established companies (EC) use various corporate venturing modes. However, as established corporate venturing modes (e.g. corporate venture capital or accelerators) do not provide direct access to start-up innovation, the venture client model (VCLM) is receiving increasing attention in corporate practice. In the VCLM, ECs become paying customers of start-ups without taking equity - they become venture clients. In joint pilot projects, they apply start-up solutions to their products, processes or business models in order to solve relevant business problems and create strategic impact for increased competitiveness. The literature lists different EC using the VCLM such as BMW, Bosch, Continental, Daimler, Siemens, or ZF. This suggests that the VCLM is only used in EC with tens of thousands of employees, from Germany and in technology-intensive sectors such as automotive, mechanical engineering or telecommunications. On the other hand, GIMMY describes the suitability of the VCLM for any EC. However, in order to develop practical solutions to the challenges of the VCLM (e.g. slow purchasing, legal and IT processes or lack of acceptance of start-ups as collaboration partners), it is necessary to know the users (type of EC) of these solutions. Therefore, the aim of this paper is to characterize the EC using the VCLM with respect to industry, size and regionality.