Types of Venture Builder
The venture building model, being relatively new, lacks a standardized classification of its various types. This is partly due to the frequent but inaccurate comparison of builders with accelerators or incubators, and partly because new types of venture builders are continually emerging, introducing novel concepts to the entrepreneurial ecosystem.
To provide a clearer understanding, the following table compares the three most commonly recognized types of venture builders: Corporate, Angel, and Academic.
In the following sections, we will delve into the unique characteristics and limitations of each of these venture builder types.
Corporate Venture Builder
Corporate Venture Builders (CVBs) differ from Corporate Venture Capital (CVC), though both are initiatives of large corporations. CVC typically involves investing in external companies to acquire a minor equity stake, often finding themselves at the mercy of the entrepreneurs whose goals may not align with the corporation's.
In contrast, Corporate Venture Building focuses on creating new entities leveraging the parent company's experience, intellectual property, networks, and knowledge. These spinoff companies operate independently but remain strategically aligned with the parent corporation, which usually retains a majority equity stake for long-term control.
The CVB model addresses the innovation needs of large companies, helping them remain competitive. Notable examples include Carrefour and Grupo Hotusa, which have successfully exploited new market opportunities internationally through this model. Other interesting cases are Renfe's Trenlab with Wayra, ABANCA Innova, and Santa Lucía Impulsa in the Insurtech and Fintech sectors.
Angel Venture Builder
Angel Venture Builders are formed and operated by experienced, resource-rich entrepreneurs who seek to expand their business creation capacity by systematizing the entrepreneurial process.
These builders represent an evolution of angel investors, who traditionally invest modest amounts in early business stages and offer financial capital, knowledge, and resources from their entrepreneurial journeys.
Angel Venture Builders allow investors to engage more deeply, not only providing capital, experience, and contacts but also actively participating in ideation and team formation.
Types of Angel Venture Builder
Angel Venture Builders typically have a specific focus, categorized into two types:
- Technological Focus: These builders specialize in applying a specific technology across various sectors. For instance, Eywa Space, a virtual and augmented reality-focused builder, uses these technologies in diverse sectors like education, senior care, and health.
- Sector Focus: These builders apply various technologies within a specific sector. A notable example is Accenture's focus on the automotive industry, integrating different technological solutions.
The technological focus benefits from the extensive use of a particular technology across sectors, while the sector focus allows the integration of multiple technologies within a specific industry.
Campus Venture Builders
Academic Venture Builders leverage the resources and talent available in universities or training centers to foster startup creation. This approach is especially effective in harnessing the potential of young talent, faculty knowledge, and institutional resources.
Unlike focusing solely on technology development, which is common in research-based institutions, academic venture builders emphasize the creation of startups that utilize or are independent of these technologies.
As highlighted in The Golden Walrus (2019), universities often inadvertently become enablers of entrepreneurship by offering solutions to common challenges faced by entrepreneurs, such as:
- Team Formation: Universities are hotbeds of diverse talents across various disciplines, offering a rich pool of potential team members.
- Facilities and Equipment: Universities provide access to a range of facilities and equipment, from laboratories to office spaces and technical gear.
- Bureaucracy Management: In Europe, the junior company model, designed for university students, simplifies business operations without the need for formal registration or complex tax filings.
- Financing: Universities with venture building programs often provide financing instruments to catalyze growth.
Academic venture builders specialize in maximizing these resources, simplifying bureaucratic processes, and facilitating funding, thereby nurturing robust startups within the academic setting.
MTA Venture Builder
A prime example is the Mondragon Team Academy Venture Builder at Mondragon University (MU). While the LEINN (Leadership, Entrepreneurship and Innovation) program focuses on academic training, MTA Venture Builder aims to create employment, innovation, and wealth through company creation. The emphasis is not merely on developing professionals but on launching sustainable businesses, extending the builder's responsibility beyond education.
MTA Venture Builder also collaborates with universities across Europe to implement similar venture building processes. This initiative not only benefits more students but also creates a network of campus-based venture builders, fostering synergies and collaborative opportunities among entrepreneurs from different universities.
Joining the MTA Venture Builder network allows universities to bypass the challenges of setting up infrastructure for venture building, raising funds, or hiring additional staff for startup incubation. It delegates these aspects to MTA Venture Builder, streamlining the process of nurturing startups within the academic environment.