The 7.5x Leverage Effect: How External Capital Multiplies Corporate R&D

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This creates a paradox: companies need to innovate to survive, yet have fewer internal resources to do so.

Fabian Dudek, Founder and CEO of Glassdolla, shifts perspective. Instead of relying solely on internal capital, corporations must tap into the vast ecosystem of external venture capital by collaborating with startups.

Drawing from an analysis of over 250,000 corporate-startup relationships and 1,000 proof-of-concepts, the research demonstrates that startup collaboration—specifically "Venture Clienting"—is a repeatable growth engine that drives measurable financial performance.

We are currently in a unique economic moment. On one hand, innovation is critical. The number of companies listing innovation as a top-three priority is increasing. On the other hand, the number of companies planning to increase their innovation budgets is decreasing. So how can we innovate more efficiently?

If you want to innovate yet lack the capital you used to have, you must become more effective. The answer is leveraging the massive amount of capital already being invested in innovation externally: venture capital.

Comparing R&D spending of OECD corporations against venture capital spending reveals a clear trend. While corporate R&D spending is only slightly growing (inflation-adjusted), venture capital is taking over. This presents an opportunity for corporations to tap into very large external R&D budgets without spending that money themselves.

Historically, the predominant way corporations engaged with startups was by starting accelerators or investing directly in companies. However, the dominant model has shifted. Today, the most effective way to engage is simply to use the startup's solutions.

Startups have already invested millions to make their solutions good. Owning shares in a company helps financial returns, yet it doesn't necessarily optimize your own company's operations. Using their solution does. It allows you to see results quickly and much more cheaply than building it yourself or investing for equity.

Startup collaboration typically manifests in two distinct areas: process optimization and product improvement.

These are collaborations that help you run your business more efficiently. For example, Trumpf and Pactum partnered on an AI negotiation chatbot that negotiates purchases too small for a human procurement officer to handle.

Individually, these purchases are negligible. However, when aggregated across a large corporation, they amount to millions in spend. By implementing this solution, Trumpf achieved "about half a million in savings within the first 12 months." This is direct saving—budget that can potentially be reallocated to future POCs.

This is what people typically associate with innovation: making the end product better. This ranges from integrating new materials to adding additional features. For example, BSH and Miele were able to offer additional services by partnering with startups rather than building the infrastructure for those services from scratch.

Until recently, there was no meta-perspective on startup collaboration. Everyone knew it was happening, but nobody knew the scale. To fill that gap, Glassdollar analyzed 250,000 relationships between corporations and startups, sourced from public case studies, press releases, and websites. The dataset is not exhaustive, since companies typically publicize only a fraction of their partnerships. Nevertheless, it is large enough to reveal some significant patterns:

The most compelling finding is the link between collaboration and financial results. The top 50 startup collaborators outgrew the MSCI World index by 40 percentage points over four years. Even removing Amazon, Microsoft, and Google from the dataset, the effect holds. Corporations that actively collaborate with startups perform better financially.

One explanation for why active collaborators outperform financially is the leverage effect. By comparing the venture capital raised by a corporation's startup partners against its own R&D budget, you can see how much external innovation spend it is effectively accessing. Amazon complements around 50% of its R&D budget this way. Marriott, which has a smaller R&D base, leverages up to 7.5x its budget through external partners.

The data also cuts across industries. Manufacturing and industrial sectors account for a significant share of collaborations, something which is logical, given that buying components is already part of how they operate. Retail and consumer goods is outperforming its weight, collaborating significantly more than its share of the MSCI would suggest. Energy is the outlier: the financial performance link was harder to prove, likely due to macroeconomic factors, though leading players like Shell are heavily active and focused on clean energy generation.

Knowing that collaboration drives value is one thing; making it happen is another. As the data reveals, innovation is not the job of the innovation team. It's the job of the entire organization.

A major hurdle is the disconnect between traditional procurement and startup reality.

When we talk about startups in this context, we aren't talking about students in a dorm room. The average startup in these successful collaborations is seven years old and has raised $40 million. However, even these companies cannot survive a 12-month procurement cycle for a pilot project.

Traditional procurement is designed to minimize risk for established vendors. Yet in a POC, you are validating a scope. You are experimenting. You don't know if the solution works yet, so spending a year negotiating is counterproductive.

Mature organizations create a procurement fast track. This fast track is a contained safe zone for experimentation with defined boundaries. For example: the POC cannot cost more than €100k, cannot use real customer or employee data, and cannot run longer than six months. Within those guardrails, business units can move without going through the full compliance process.

By establishing these boundaries, the innovation team can lobby for a mandate that allows business units to bypass complex compliance for the initial test. This becomes a massive value proposition to the business units: "If you want to try anything out, come to us, run through our process. It's going to save you so much time."

The question surfaces regularly: how do you prove the value to leadership?

The recommended methodology is treating POCs like a venture capital portfolio. You don't bet on one; you bet on a cluster.

If you start with three projects, you aim to prove three things:

With an average POC costing around €50k, a portfolio of three costs €150k. If that portfolio uncovers a business case that returns €1 million, the math is simple.

The practical question surfaces: where should the POC budget sit?

The preferred setup at the start is in the central innovation team budget to prove the model. As you grow, you shift funding more and more towards the business units, because if they are not willing to spend budget on it, it signals lack of commitment.

At the same time, there are often solutions that help the business yet don't necessarily show up in the P&L of the business unit itself. Hence, there should always be some level of central innovation budget to subsidize cases that are highly strategic, more mid-long term, or benefit others not directly in that business unit.

A pattern emerges repeatedly: about 80% of large corporations are already collaborating with startups—they just don't know it across silos. The task isn't proving collaboration works; it's showing leadership what's already happening and how to systematize and scale it.

The most effective methodology is to map existing partnerships, show the volume underway, then demonstrate how coordination amplifies results. When business units that are already working with startups describe their experience, they typically say: "the collaboration is good, but it was so much work I had no idea how to do this. It's not my typical job... honestly, there were multiple times where I thought I would give up."

The data suggests that startup collaboration is moving from a competitive advantage to table stakes.

Moving forward, a critical future dynamic erupts: this is also a competition for talent.

If your procurement process takes 12 months, the best startups will go to your competitor who can start in one month. Positioning yourself as a "customer of choice" is essential for securing access to the best technology.

Ultimately, venture clienting allows corporations to crowdsource innovation globally. It is about tapping into the best minds and biggest budgets outside your four walls to solve internal problems.

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