When Axel Deniz took the stage at Innov8rs Manchester, he called his venture building unit “one of the last ones standing.”
He wasn’t exaggerating. Across Europe and the US, most corporate venture builders have closed. What has kept Bosch Business Innovations going comes down largely to what Axel promised. In a company with €91 billion in sales, a €200 million fund won’t move the P&L, so he didn’t promise revenue. He promised a way to test markets Bosch isn’t in yet, run like an investor.
The other two pieces this week back that up. Like Bosch, JLR, Old Mutual and PwC set up every venture as its own company from day one. Where they differ is equity: Jasdeep, Vuyo and João Paulo each use their own rule for how much founders get. Research on more than 100 CVC units finds that the units that survive agree with their CEO and CFO, in writing, on what the unit is for. That is usually some mix of strategic learning, options and returns, which is close to Axel’s approach.
What have you promised your board that your portfolio can’t deliver?
Hans Balmaekers
Founder, the Compass and Novum
Why Bosch’s €200 Million Venture Builder Isn’t About the P&L
Bosch’s venture unit creates startups to explore markets the company has yet to enter. It builds them on unused patents and places them in separate companies outside the corporation, run by outside founders and venture studios.
Many corporate venture builders have already closed. Axel Deniz runs one of the few programs still operating, a model he calls the “un-corporate” venture builder, and he has a clear vision how to keep it from being shut down three years in.
Axel Deniz runs Bosch Business Innovations, the venture builder inside the industrial group, where he raised a €200 million fund from his parent company to build hard-tech startups. With €91 billion in group sales in 2025, even a startup that reached a billion euros in revenue would barely influence the P&L. So a very successful portfolio would make little material difference to group revenue. Revenue was the wrong thing to promise.
Therefore, Axel pitched the fund as a strategic tool for testing new markets, run with a financial investor’s discipline. The fund gives the company a capital-efficient way to test markets it has yet to enter, and after five years, a portfolio of stakes it can buy, move into a business unit, or keep.
For innovation leaders defending their own venture unit, the Bosch model offers a full setup to test against their own: the board pitch, the cap table, the incentives for each partner, and the three options the board chooses from after five years.
Separate From Day One: How JLR, Old Mutual and PwC Set Up Ventures
Only 22% of venture building programs give founders equity. At JLR, Old Mutual and PwC, founders get a stake — while every venture starts life as its own company.
Every corporate venture starts with a question its parent has yet to answer: will this business one day leave home, or return to the parent? Jasdeep Sawhney, who runs InMotion, Jaguar Land Rover’s venture building arm, says his team is “never sure right from the beginning” which way a venture will go. So the preparation starts on day one, with leadership backing, a separate company, the right founder and a clear equity split.
Jasdeep compared notes on that preparation with Vuyo Mpako, head of Old Mutual’s Next176 unit, and João Paulo Fernandes, venture builder and entrepreneur in residence at PwC Germany. JLR builds new business models, such as selling direct to consumers, that sit outside what its core organization is set up to run. Old Mutual looks for outside investors in its ventures from the start. PwC builds ventures, like circular economy solutions, that need many companies to take part.
The units build very different ventures, yet all follow the same four tactics, which other corporate venture builders can adapt to their own setting.
Still Standing: Would Your Venture Unit Survive Its Next Budget Review?
Units that last don’t try to remove their internal tensions. Seven years of research with more than 100 corporate venture leaders shows the routines they use to manage those tensions instead.
Most innovation leaders know how the story goes: a venture unit launches with big promises and a CEO announcement on an earnings call. A few years later, the updates slow, the team moves into M&A or strategy, and the unit’s name drops off the organizational chart. Often, the unit had delivered credible investment results.
Xerox has lived that story - twice. In 1989, the company launched Xerox Technology Ventures, a $30 million fund that backed startups such as Documentum and grew past $200 million in seven years. Xerox closed the fund in 1996, as internal conflict grew over who owned the gains and who deserved the credit. In 2021, the company tried again with Xerox Ventures, and a few years later it closed that unit down and moved its investments into an independent fund.
Xerox’s fund performed well, but internal conflict still brought it down. Seven years of research suggests that this occurs in many corporations. In a recent Harvard Business Review article, Ezra Carlson and Mehdi Safavi of Cranfield School of Management, with Nicolas Sauvage, president of TDK Ventures, share findings from their work with more than 100 participants from corporate venture capital (CVC) units, which invest in outside startups. Like Xerox, the units in their study faced their biggest threats from inside the company.
Most importantly, the ones that survived built routines to manage those internal tensions. Each routine gives innovation leaders a check to run against their own unit, before the next budget review.
What’s happening @ Novum
What role should Innovation play when business units are increasingly expected to drive growth themselves? We’ll welcome Frank Mattes for a session exploring how the role of “innovation” is evolving as companies push innovation closer to the business, while budgets and patience for long-term innovation activities continue to shrink.
We’ll look at how innovators can identify growth initiatives that may look like straightforward execution but involve significant uncertainty around customer adoption, capabilities, go-to-market, or internal collaboration. We’ll also discuss how “innovation” can reposition itself as a valuable partner to business units, helping them navigate uncertainty and turn growth opportunities into results.
Curious to join this discussion about the evolution of our role? Join the Novum Society - check this page for more info.
Next week, we look at governance and portfolio, specifically the gap between what leadership says the strategy is and where the money and people actually go.
Bosch’s setup is unusually explicit: a fixed fund, named theses, and one thesis already stopped. Most portfolios are much harder to read. If you’ve seen that gap in your own company, or found a way to close it, hit reply. I’d love to hear your story.
Hans
Hans Balmaekers
Founder, the Compass and Novum
