“In addition to their R&D organizations, corporations are realizing that investing in startups can be a significant innovation driver.” – Evangelos Simoudis, Corporate Venture Capital’s Role in Disruptive Innovation.
Should early stage companies work with corporate venture? Some investors, like Paul Graham, advise against early stage firms talking to corp dev. But what about corporate venture capital (CVC)? Since we started Urban.Us, we’ve been struck by the growing number of CVCs who want to work with early stage founders.
What’s changing? M&A has long been an option for corporations wishing to augment their own internal R&D efforts. Even organizations with tremendous R&D capacity depend on M&A. Think about how Google, Facebook, and Apple have grown through acquisitions, especially in recent years.
CVCs enable firms to start developing relationships earlier. In the process, they can gain understanding of emerging trends and begin to identify high potential teams for possible investment or partnerships. And they can begin adding value as an investor, long before initiating M&A discussions.
Evangelos Simoudis is uniquely positioned to comment on the intersection of early stage investing, innovation and startups. He explains why we should expect to see more CVC activity.
[Startup Candidate] Local Root Farms – Growing food in cities can have many benefits, but so far the economics haven’t worked. Local Root Farms might have the answer.
[Startup Candidate] Evercharge – EV adoption is being hindered in some non-obvious ways. Owners and building managers are finding that it’s not easy to deploy chargers into residential parking garages. Evercharge knows how to take away their pain.
[Insights] How cities miss the biggest procurement risks – Sascha Haselmayer shares a great perspective on how cities focus on the wrong risks when managing procurement. And yes, he does know what to do about it.
[Insights] Powering climate action - C40 Cities & ARUP dig into the data on how different city governments can drive climate action. (thanks Eric Ast for sharing)
[Insights] Death by Fauxmentum – Mark Suster calls out the perils of paying too much to acquire customers. We hope Fauxmentum remains in widespread use to remind people of the potential harm. SAAS Metrics 2.0 can help keep you honest.
[Opportunity] NYC BigApps - Announced 2 of the 4 challenges for this years contest: Connected Cities: Use IoT to improve NYC; Help NYC achieve Zero Waste by 2030. Submissions open on 7/16. Learn more. @NYCBigApps
[Opportunity] Target Open House – Launched last Thursday evening in San Francisco, the space is worth checking out to see how connected home experiences (and products) can be explained, experienced and sold. And they want to work with more early stage startups! More from the Target Open House team. (Congrats Patricia Adler & Luis Galvez)
[Update] Hacker News for government - The team at Seamlessdocs wants your help to build out their new tool for tracking innovation in government. Check out Govbyte.com.
[Update] 150,000,000 gallons - This is how much water Rachio’s customers have saved in their first year. Reducing municipal water infrastructure costs, is one step closer to reality. Rachio is also featured at Target Open House (cities will get smarter via retail channels too).
[Insights] What does a great opportunity look like? - Two founders who have been lifelong friends and went to Stanford for engineering and business schools and then worked at Google? A massive market? A fantastic product? It’s not that simple.
[Insights] a16z Podcast - The changing relationship between tech and government discussed by current and former mayor of Washington D.C. Listen in. (HT Sameer Rashid for sharing)
[Reminder] Picking winners at the seed stage is (still) hard - Here are AirBnB’s seed stage rejection emails and seed stage passes on Pinterest, GoPro and DropBox by one of today’s most successful seed investors. And while raising money seems important, so many successful firms didn’t raise venture money.
There are lots of ways to build a successful startup. Stay foolish.
- Shaun, Stonly, and Anthony
P.S. We really can’t wait to tell you about the newest two Urban.Us companies. Unfortunately we have to wait another few weeks.
P.P.S Stonly talked with Wharton Business Radio for 'Dollars & Change - Urban.Us'. If you don’t already have SiriusXM, here is a direct link to a free trial where you can listen to the segment on demand www.siriusxm.com/freetrial