Collaborating with Startups from a Corporate Viewpoint

Written by
William Horyn

Co-authored with Divya Sudhakar


A Brief Historical Perspective

Though Silicon Valley didn’t earn notoriety until the end of the 20th century, there was a subset of forward-thinking corporations who embraced partnering with early-stage ventures before it was cool. Going as far back as 1914, DuPont — the long-standing chemical and plastics manufacturer — was an early investor and strategic partner of a budding startup at the cutting edge of the automotive revolution called General Motors. Over time, DuPont invested more and fostered an increasingly tight partnership with GM, betting that the startup’s success would drive additional sales of DuPont’s products (such as artificial leather, plastics, and paints) as well as generate a handsome return on investment. Though DuPont was a first-mover, others soon followed suit including the likes of 3M, Alcoa, and General Electric. These conglomerates sought to diversify their product offerings and revenue streams, putting excess cash to work outside of their core business models.

The Importance of Startup Innovation for Corporations and Ways to Work Together

There are multiple reasons why a corporation may choose to engage in the startup ecosystem. From our experience, some of the top ones include:

  • Diversification into new markets, from both a product and a geographic perspective: Partnering with startups can represent a quick path into a new geography or market segment not currently served by a corporation’s portfolio. In addition to broadening the product offering in the near-term, this can yield valuable insights and inform a potential organic strategy in the medium/long-term.
  • Accelerate Product Roadmap: Startups have the benefit of being agile, with the ability to quickly iterate a targeted product set based on real-time customer feedback. For better or worse, established corporations don’t always have the same luxury given processes and guidelines that have been put in place. It’s also understandably challenging for a large corporation to focus on incubating an entirely new product/market when existing products are generating substantial sums of revenue. Engaging with a startup operating in a similar or adjacent category can speed up a corporation’s own roadmap, providing access to otherwise inaccessible market intel.
  • Improve Competitive Positioning: Ultimately, startup engagement offers the potential for substantial competitive advantage. This can be in the form of having access to the latest technology, market intel, new GTM motions, and new geographic access, among others.


GTM partnerships are a key and common way to work with emerging companies. They represent an opportunity to mutually realize synergies without necessarily over-committing resources or product roadmap on either side. They can take many forms, but two common approaches include:

  • Co-Sell: Co-selling arrangements generally involve a collaborative selling motion, with one party amplifying the distribution of another product and receiving a share of the sale proceeds as an incentive. Given that corporations typically have established platforms, they are usually the party that promotes a startup’s solution. The incentives are aligned: the startup benefits with additional distribution and sales, while the corporation collects a portion of the sale and strengthens the attractiveness of their platform.
  • Original Equipment Manufacturer (OEM): An OEM relationship requires deeper alignment between parties, as there is often a meaningful technical integration and only one seller. Typically, the corporation will sell a startup’s software under their own brand or a new brand created for the specific solution. As with the co-sell motion, there is a bookings share and the startup benefits from greater distribution. However, because the software has been rebranded there is less market awareness for the underlying vendor, and as a result they may negotiate a greater share of the sale proceeds. In addition to partaking in the deal economics, the corporation benefits by leveraging the OEM arrangement to quickly gain presence in a new market or segment rather than increasing sales of their core products as is often the case with a co-sell agreement. It’s worth noting, though, that the seller often bears the brunt of related support costs in these types of partnerships.

Product Partnerships:

A product-oriented relationship (as opposed to a GTM-driven one) is another way for corporations to engage with startups for mutual benefit. This can manifest in different ways, including:

  • Product Integration: Create a “better together” story. In the late 2010s, Mobileye was a leader in mapping and self-driving technology, while Moovit was known for its comprehensive urban mobility application. When the two companies joined forces in 2020, they sought to unite their individual core competencies and together bring to market a new foundation for the future of mobility.
  • Product Enhancement: Better suit customer needs. In response to changing infrastructure and increasing regulatory demands on Financial Services Industry (FSI) businesses, Fortanix — a Silicon-Valley based enterprise security vendor — developed a security solution (SDKMS) to offer a single point of management for data security across the enterprise. However, Fortanix did not go it alone — their new platform is underpinned by Intel’s SGX solution, a secure hardware foundation that boosts the security of application code and data for cloud deployments. By working together Fortanix and Intel were able to produce a new FSI-friendly security paradigm enabling digital transformation while also protecting sensitive data.


Lastly, with enough conviction on both sides, an acquisition can serve as an effective means for corporates to benefit from startup innovation. This yields full control over the product roadmap and GTM motion, while driving deep alignment to corporate strategy and accelerating time to market for any new solutions. There are of course numerous examples of this, such as Cisco’s acquisition of Opsani or Intel’s acquisition of Nervana Systems.

How to Create a Successful Partnership with Startups

As tempting as it may be to launch into GTM or product partnership discussions with promising startups, many corporations misjudge these opportunities, resulting in wasted resources and poor outcomes for all parties. The below graphic depicts a framework intended to inform the decision-making process when engaging with startups:

  • The corporation needs an internal sponsor(s) owning the relationship to ensure accountability and continuity
  • Clarity on goals and a roadmap, with measurable milestones or KPIs
  • Open communication to establish and maintain alignment

Bringing it All Together