In 2024, the Venture Client Model reached the “Peak of Inflated Expectations” on the Gartner Hype Cycle for New Innovation Practices. This recognition underscores its growing influence as a transformative approach to corporate innovation. However, while the Venture Client Model is making waves, it is important to explore how it complements—or contrasts with—models like Corporate Venture Capital (CVC) as a Service, particularly in the context of Mandalore’s innovation strategies.
What is the Venture Client Model?
The Venture Client Model, pioneered in 2014 by Gregor Gimmy at BMW, focuses on solving corporate challenges by treating startups as suppliers of innovative solutions. Corporations act as paying clients, purchasing and integrating startups’ technologies directly into their operations. Unlike traditional corporate venture capital or innovation programs, this model emphasizes:
Rapid testing and deployment of startup innovations.
Transactional relationships without equity investments.
Focus on immediate operational value rather than long-term financial returns.
By 2024, this model’s inclusion in the Gartner Hype Cycle indicates that it has reached widespread interest but still faces the challenge of proving its sustained value beyond initial excitement.
What is Corporate Venture Capital (CVC) as a Service?
Mandalore’s Corporate Venture Capital as a Service (CVCaaS) model, in contrast, provides corporations with managed investment programs in startups. It offers:
Equity investments for strategic or financial returns.
Portfolio management services to identify and nurture high-potential startups.
A long-term focus on influencing industry trends through strategic ownership.
CVCaaS helps corporations position themselves as stakeholders in emerging technologies while building an ecosystem of innovative startups around their core business.
How the Models Compare
While the Venture Client Model and Mandalore’s CVCaaS have overlapping goals of fostering innovation and startup collaboration, their approaches differ significantly in purpose, implementation, and outcomes. Here’s a side-by-side comparison:
Aspect Venture Client Model CVC as a Service (CVCaaS)
Objective Solve operational challenges through startup solutions. Invest in startups for strategic or financial returns.
Engagement Type Buyer-supplier relationship. Investor-investee relationship.
Risk Low—focused on transaction-level engagement. High—equity investments carry financial risk.
Commitment Short-term, project-based. Long-term equity ownership and influence.
Speed Rapid testing and integration. Slower, due to due diligence and investment processes.
Focus Operational value and innovation adoption. Strategic influence and ecosystem building.
Impact on Startups Revenue generation and market validation. Funding, strategic guidance, and scalability.
Complementary Models for Corporate Innovation
Despite their differences, the Venture Client Model and CVCaaS can work complementarily to create a holistic innovation strategy. Here’s how:
1. From Transactional to Strategic Relationships:
Corporations can use the Venture Client Model to identify and test startups with potential. Once proven, the most promising startups can be brought into a CVC portfolio for equity investment and long-term collaboration.
2. De-risking Innovation:
The Venture Client Model serves as a low-risk testing ground for corporate-startup partnerships. Startups that deliver operational value can transition to the CVC model, where corporations take on a higher commitment through equity.
3. Diverse Objectives, Unified Outcomes:
Venture Client Model addresses immediate business needs with quick wins.
CVCaaS builds strategic capabilities and positions the corporation as an industry leader over time.
4. Efficient Resource Allocation:
By leveraging the Venture Client Model, corporations avoid investing equity in untested startups. Only startups with proven results are funneled into the more resource-intensive CVC model.
Mandalore’s Approach: Leveraging Both Models
Mandalore’s Corporate Venture Capital as a Service is designed to align with the strategic goals of its corporate clients, focusing on industry leadership, ecosystem development, and long-term growth. By integrating principles of the Venture Client Model into its strategy, Mandalore offers a dual-track approach:
Innovation Adoption: Using Venture Client practices to rapidly test startup solutions.
Strategic Investments: Transitioning successful startups into its CVC portfolio for scaling and deeper collaboration.
This hybrid strategy ensures that corporations benefit from immediate operational improvements while positioning themselves for future industry leadership.
Conclusion: The Gartner Hype and the Future of Innovation
The Venture Client Model’s inclusion in the Gartner Hype Cycle signifies its growing prominence as a practical, low-risk innovation tool. However, as with any innovation approach, its long-term value depends on successful implementation and integration into broader corporate strategies.
By combining the strengths of the Venture Client Model with the strategic depth of CVCaaS, corporations can unlock a two-pronged approach to innovation—immediate results today, strategic advantages tomorrow. Mandalore’s ability to leverage both models offers a blueprint for companies looking to stay competitive in an era of rapid technological change.
The question for corporations is no longer whether to engage with startups but how to engage effectively—and the answer often lies in using the right combination of these complementary models.