Impressed by the breakneck growth of digitally-native companies such as Amazon, Alphabet, and Alibaba, established companies are spending enormous energy and money on digital transformation efforts. Many of these projects are led by scrappy “intrapreneurs” who launch a new digital venture inside an existing firm. They have the vision and persuasive powers to convince their company to provide early funding — driven, in part, by the desire of the company’s leadership to pursue a compelling digital initiative.
A New Model to Spark Innovation Inside Big Companies
With a venture buyout, an established company partners with a VC firm to spin out an internal startup.
May 12, 2021
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Summary.
It’s always been challenging to launch new ventures inside an existing business. One way internal startups can overcome some of the disadvantages they face is by seeking out external funding from venture capital firms — a model we call a venture buyout, or VBO.