As a corporate innovator, you’ve likely faced the formidable challenge of solving complex problems with limited resources, slow-moving processes, or a lack of entrepreneurial flexibility.
Turning to startup partnerships might seem like the perfect solution to drive fresh energy and innovation into your organization.
But too often, these collaborations fall short. Misaligned goals, clashing cultures, and mismatched timelines leave you stuck. Your internal resources aren’t enough, and external partnerships fail to deliver.
So, what’s the solution? What if you could build startups from the ground up, tailored specifically to your organization’s needs? Imagine combining the agility and ingenuity of a startup with the strategic focus of your corporation.
In a recent Innov8rs Learning Lab session, Matthew Brady and Colin Macdougal from Alloy Partners shared how building “advantaged” ventures could be the game-changing approach you’ve been looking for.
Matthew Brady & Colin MacDougall
GM at Alloy Partners | Director at Alloy Partners
Why Venture Building Gets Sidelined in Corporate Growth Plans
When “venture” comes up in a boardroom, there’s skepticism. It sounds risky, and disconnected from the pressing demands of the existing strategy.
The fallback? Tweak what you’ve got, buy what you can’t build fast enough, or partner with what’s already out there. But these routes can be slow, messy, or both.
“It’s actually easier to tool a new startup than it is to retool an established incumbent,” says Matthew. He points out that legacy structures and short-term incentives often hamper transformation through acquisition or partnership.
Corporations undervalue venture building as a tool when they’re executing against their growth strategy, but when approached strategically, it can address gaps that internal initiatives and M&A can’t touch.
To do so, venture building should solve specific, intractable business problems: Don’t chase “moonshots” for their own sake. Drive venturing towards persistent roadblocks that hold back your business priorities.The value isn’t just in equity or returns, but in speed, focus, data, and first-mover access tied to your core strategy.
Begin with your own business’s pressing needs, but don’t hesitate to look outward when necessary. Sometimes, building externally or even spinning off a new venture is the best way to break through inertia and achieve progress.
So, why is this the case? How can corporate venture building help you overcome your most persistent roadblocks? And, what practical steps can you take to build an “advantaged” business?
Venture Building as the Solution to Your Thorny Problems
The trend lines don’t lie. AI is compressing old barriers to entry. Regulatory uncertainty is the new normal. Cost pressures are intensifying. And the “tyranny of the urgent” can grind innovation to a halt. That’s where corporate venture building comes in. But it’s not about distant moonshots or betting everything on far away, uncertain futures. It’s about solving today’s stickiest operational challenges first.
The best venture-building strategies start small and solve business-critical problems. Colin emphasizes, “Start by solving very tactical problems that your business has today.”
Whether it’s runaway cost drivers, supply chain gaps, compliance bottlenecks, or stalled adoption curves, startups built with a clear, tactical purpose can unlock immediate ROI and create momentum for broader transformation later.
By starting with operational wins, venture investments can be justified more quickly and establish a foundation of credibility and internal alignment for bigger, longer-term bets.
It’s tempting to chase external trends, but lasting innovation starts closer to home. “Corporate venturing must start by looking inside at the needs of the business,” says Matthew. Focus on the bottlenecks, cost centers, or capability gaps that are stalling your execution and growth.
Matthew shares an example of a Fortune 500 pharma company tackling an out-of-control cost driver in marketing compliance. They launched a startup that leverages generative AI to streamline regulatory reviews. This solution helped cut tens of millions in direct expenses and provided an annuity-like benefit almost immediately.
The Corporate-Startup Dynamic Revisited
The classic “David vs Goliath” idea of startups battling big corporates is outdated. Matthew explains, “This isn’t about the old framing of David against Goliath. This is really about David and Goliath teaming up and joining forces.”
But successful collaboration doesn’t happen by chance. Corporate hierarchies, rigid processes, and slow decision-making often stall partnerships before they gain traction. Meanwhile, startups (especially mature ones) can’t always interpret what a corporation truly needs, nor do they have access to the data, distribution, or funding that could accelerate their growth.
That’s why the most strategic move often isn’t to partner with a startup that already exists. It’s to design one. As Matthew says, “You might need to build the Davids first, because they might not exist.”
Building bespoke startups allows you to:
- Solve persistent, high-value problems faster
- Align every decision to your core strategy
- Unlock unfair advantages with your data, channels, and customer access
When you build or shape startups from the earliest stage, you gain a rare opportunity to align every element of the venture around their specific business challenge.
Why wait for startups to mature when you can shape the startup’s focus, product design, go-to-market strategy, and even its talent choices? This allows you to tightly align the venture’s success with your corporation’s most pressing strategic objectives, while offering the startup critical early access to customers, data, and industry expertise.
“The priority of your corporation (your strategy) can become the singular objective of this startup,” explains Matthew.
Too often, companies gravitate toward startups that are already well-established, with polished products and existing customers. But by that stage, the startup’s direction is already set.
Matthew outlines the recurring issue, “Every company that we have worked with will tell us about how they’ve engaged with a huge, long list of startups at the mid-stage, and after a few years, they usually realize that the solutions of that startup are not the right fit for the problem they’re trying to solve.” It’s an expensive cycle of near-misses and missed opportunities.
This is where early-stage engagement or even building from scratch offers a distinct strategic edge. At the earliest stages, the “clay is still wet.” You can help shape the product and the DNA of the company. In return, the startup benefits from privileged access to your domain expertise, customer base, and scale-up resources.
Done well, this is a win-win. “Corporations get to be selfish by playing in the early stage,” Matthew says. “And the startups get to be selfish, too. They get to have you as a customer or as an ally. These are advantages that mid-stage and late-stage companies would absolutely kill for.”
When you design the dynamic on your terms, and with mutual commitment and strategic intent, startups become more than just external disruptors. They become tailored tools to solve your most persistent problems and unlock growth from the inside out.
How To Spot The Right Problems
Corporate venturing is just one lever, not a silver bullet. Colin compares it to a Swiss Army knife. You rarely use it, but at the right moment, it’s indispensable.
The classic growth levers are:
- Build (develop in-house, often slow and expensive)
- Partner (contract with others, quick for well-solved problems)
- Buy (acquire, highest risk and cost)
- Do Nothing (often the real default choice)
Colin stresses that the “Venture Lever” as new option should be used only when existing solutions don’t align or don’t exist. Startups are best leveraged to solve a specific, value-creating problem fast.
How do you know if venture building is the right play?
- The problem is persistent, costly, and can’t be solved internally
- No external solutions truly fit, or would require painful adaptation
- The opportunity aligns with your business’s selfish interest
- Your organization has assets a startup could use for mutual gain
Colin emphasizes, “It’s not your first option for anything, but after a little bit of digging, you might see a really nice fit between a specific problem and the advantages a startup can bring.”
Three Real-World Case Studies
Colin presents three compelling case studies that showcase how organizations have successfully built ventures to address critical operational challenges, expand into adjacent markets, and create new value chains.
Fixing the Core Business
A pharmaceutical company grappling with high marketing compliance costs—an ongoing drain on resources—launched Revisto, a startup designed to address this challenge. Leveraging its proprietary platform, Revisto delivered immediate ROI by reducing expenses through direct access to workflow and compliance data.
“Revisto proved that innovation can start from within. By addressing a fundamental pain point, compliance was transformed from a cost center into a streamlined, value-driven process,” emphasizes Colin.
By automating audits, streamlining approvals, and enhancing oversight, the company lowered costs and improved the speed and accuracy of compliance processes, ensuring it stayed ahead of regulatory demands.
Entering Adjacent Markets
To tackle the challenge of establishing a carbon credit market for the dairy and livestock industries, an agricultural life sciences company launched Athian. This startup collaborated closely with producers and used agricultural data to unlock millions of dollars in value for farmers, while also strengthening the company’s product pipeline.
Colin explains, “Athian exemplifies how collaboration and data can turn sustainability into profitability. By working directly with farmers, they unlocked value for all while setting a new standard for sustainable agriculture.”
The effort incentivized sustainable practices, helped reduce carbon footprints, and opened up a new, profitable market, positioning the company as a leader in sustainable agriculture.
Creating New Value Chains
Confronted with the need for a secure and resilient feedstock supply chain for a retrofitted renewable energy power plant, a utility company created Chuck. Rather than rely on traditional suppliers, the startup found an innovative solution in waste biomass from real estate developers.
“Chuck is a perfect example of how creative thinking can turn waste into opportunity. By reimagining supply chains, they not only solved a critical challenge but also created a sustainable future for the power plant,” says Colin.
Chuck connects developers’ waste streams with the utility’s feedstock needs. The result was a sustainable supply chain that turned waste into fuel, minimized environmental impact, and ensured the power plant’s long-term viability.
A recurring theme in each case study is that the ventures don’t just solve hypotheticals. They tackle “painful now” problems, deliver quick wins, and serve as building blocks for broader transformation. Every project starts by asking where the company’s present pain aligns with its strategic intent.
The collaboration between the core and the venture isn’t about compromise. Each side should bring (and expect) tangible gains. The result is a virtuous cycle of learning, execution, and competitive advantage.
Why a Portfolio Approach Matters
One of the most important shifts for corporate innovation teams is to move away from placing all bets on a single venture and instead adopt a portfolio mindset. Matthew explains, “Launching one startup might move the needle for your business, but it might also be risky. We would argue for more shots on goal.”
Some ideas will inevitably underperform or encounter unexpected barriers. By pursuing a portfolio of ventures tied to a range of critical business problems, companies spread their risk, increase their chances of meaningful success, and create more learning opportunities along the way.
Colin adds that a thoughtful portfolio isn’t just about launching multiple ventures randomly. It should be strategically curated around a company’s most pressing growth challenges and emerging opportunities. He says, “If launching a startup is your plan for building your ‘B’ business, that one shot on goal is probably not going to be sufficient to your risk-adjusted expectation of the future.”
To address this, Matthew notes that many organizations are now asking for “a semi-permanent venture studio so that they can create a portfolio of solutions and help build out an ecosystem within their space.”
The key is to start by focusing on smaller, well-scoped ventures that directly address operational bottlenecks, cost drivers, or market adoption gaps, while also building a foundation for longer-term growth bets that align with the core business strategy.
