CORPORATIONS ARE NOT VENTURE CAPITALISTS

When it comes to innovation in established companies, the rage has long been to try to emulate the behaviors of entrepreneurs and the swashbuckling investors who back them. The explicit belief is that what works in Silicon Valley can be replicated inside companies with similarly efflorescent results...

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Bibliographic Details
Published in:The Conference Board Review 2011-01, Vol.48 (1), p.68
Main Author: Raynor, Michael P
Format: Article
Language:English
Subjects:
Entrepreneurs
Innovations
Venture capital
Online Access:Get full text
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Summary:When it comes to innovation in established companies, the rage has long been to try to emulate the behaviors of entrepreneurs and the swashbuckling investors who back them. The explicit belief is that what works in Silicon Valley can be replicated inside companies with similarly efflorescent results. Most venture funds impose selection pressures almost immediately, apportioning their investment dollars based on whether a venture is able to hit defined milestones within specified periods of time. New businesses are almost always kept hungry, spurred on by the promise of riches if they reach commercial success. In contrast, when an established company seeks to liberate the nascent blockbuster ideas that allegedly lay fallow in their fields of cubicles, it must pay for all that sweat equity in either official on-the-clock time or diverted discretionary effort. Corporations need to accept that they cannot replicate or even meaningfully imitate the venture-capital approach.
ISSN:1946-5432