Don’t get me wrong here. I love the fact that many large corporations identified the need of innovating and pushing young talent and ideas forward. It’s the only way to be able to compete on a global scale. It also helps to improve the image of Entrepreneurship a whole lot. Failure will soon not be stigmatized anymore, partly because of the engagement of large corporations pushing the entire Entrepreneurship thing.
But what’s befuddling me is the sheer endless amount of seed financing made available, through corporates and Business Angels, whereas the situation for a follow up investment seems kind of blurry to me. It looks like we have an excess supply of seed money, whereas money for a series A seems a lot tighter, especially here in Germany.
The seed funding volume seems to increase a lot quicker than the volume available for follow-up rounds coming from bigger investors, like VCs. I somehow get the impression that we are in the same kind of Series A crunch the US were in last year.
Another thing that confuses me is the ambition of corporate accelerators and incubators. Do they really plan to integrate some of the startups into their corporation to extend their main operations and become more innovative? I highly doubt that, especially when we have a look at successful startups.
According to John Mullins, author of “Getting to Plan B”, two thirds of successful ventures kicked off with a completely different idea than they ended up being successful with. They pivoted heavily. Such a pivot (change of product, strategy, etc.) would mean that the product the startup planned to offer changed a whole lot.
This is something highly critical, as the initial idea the startup started with was identified as relevant for the corporation' s strategy. The new product might not at all fit into any of its business units any longer.
So I am wondering what the reasoning behind all these corporate accelerators and incubators really is? Are they just a new way of getting a piece of the startup cake a lot earlier than before? Or do they just want to bring in some youngsters to loosen up their corporate culture? I can’t help myself but here`s something I already thought a couple of times:
“Corporate accelerators and incubators are just a marketing stunt to attract attention and new talent.”
What do you think about all of this? What do you think about corporate accelerators and incubators and their real purpose?