Many think the relationship between startups and corporations is a lot like David and Goliath, the underdog pitted against a powerful giant.
But, do they need to be enemies on the battlefield? Is there another way to tell this story?
Instead of foes locked in a standoff fighting over resources, corporations are exploring a new way to get along with startups. By forming mutually beneficial partnerships, both sides can leverage resources to help each other grow and scale.
Take a look at what’s happening in the startup ecosystem in Thailand, for instance. Ecosystem development there started much later than in East Asian countries. However, while Thailand still lags, the pace has been moving fast and accelerating. Since 2012, at least 10 corporations have formally joined Thailand’s investor community, which continues to contribute to the startup explosion we’ve seen in 2017–all the way from 3 in 2012 to more than 90 startups getting funds in 2017. In addition, thanks to generous government support (to the tune of US$570M!) deposited into venture capital funds, the funding sources driving the number of startups is diverse.
HOW STARTUPS & CORPORATES CAN FORM SYMBIOTIC RELATIONSHIPS
So, how can startups and corporates help each other? For startups, time pressure, limited funds, and a small team all contribute to innovation and speed. However, when it comes to scaling up, oftentimes startups face challenges proving their value in the market and acquiring sufficient capital.
For large corporations, it’s the other way around. They already have a large customer base, deep pockets, as well as value in the marketplace. At the same time, because corporates are massive, innovation can take time and implementation even longer. With complementary strengths and weaknesses, corporates and startups can work together and leverage each other's strengths.
NEW ROLES FOR CORPORATES IN TAIWAN?
Taiwan ranks 15th in the world for global competitiveness and is also home to the world’s top computing-related corporations like TSMC, Foxconn, HTC, Asus, and Acer. However, times have changed and new rivalries are emerging. One way that corporations can stay ahead in the game is to embrace new technologies — work with startups or invest in startups by setting up CVCs.
So, what are CVCs? Basically, a CVC (also known as Corporate VC) is the investment arm of a corporation.
If you try searching online for “CVCs in Taiwan” or “corporates in Taiwan startup scene”, you’ll likely get few relevant results. Now switch out “Thailand” for “Taiwan” in the same search, and a bunch of names for Thai corporates will likely appear.
Why is this so? While we do have all kinds of support programs for startups in Taiwan such as accelerators, incubators, and government programs, corporates are not among the active players. Unlike the U.S., or Southeast Asia, where corporates are establishing business innovation units, setting up CVCs, and even running accelerators, Taiwan’s corporates mostly rely on accelerators, incubators, or foreign trade councils to help them pair up with startups.
While neither way is inferior to the other, each approach has its own benefits and costs, Let’s take a closer look at the pros and cons of Taiwan’s corporates relying on ecosystem players to do startup matching.
Whether it’s setting up a business innovation unit/CVC/corporate accelerator or choosing to leverage business matchmaking opportunities from other ecosystem players, Taiwanese corporations might benefit from looking into the strategies that our Southeast Asian and American counterparts are implementing.
Want to read more about corporate VCs? Stay tuned to our upcoming articles that will focus more on the startup perspective, the differences among CVCs and VCs, as well as different corporate innovation models in Thailand!
WANT TO SEE IT FOR YOURSELF?
Are you a startup that’s interested in seeing a diverse funding environment? From June 19th-23rd, we will be selecting 5 startups to join Techsauce Global Summit in Thailand and holding a demo day to help startups meet and connect to ecosystem players! For startups considering Southeast Asian markets, this is an opportunity that you shouldn’t miss out on! Find the right partnerships and local support before breaking into a new market! .
If this opportunity interests you, apply for Rock The Mic ASIA on April 19th. For just a 2-minute pitch on stage, you can win a FREE trip to Techsauce Global Summit Thailand, RISE Conference Hong Kong, or Infinity Ventures Summit to showcase your product, raise funds, connect with international media, or develop business partnerships!
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