Corporate: “Start-ups must have realistic expectations”

For large groups, developing their relationships with start-ups is a way of better understand the world of start-ups and to experience their unique agility and capacity for innovation. It is also an opportunity to discover and to understand new models of the value chain, which are possibly likely to significantly displace strategic issues.

For start-ups, corporate brings credibility and reputation. In B to B, it is also a guarantee of sustainability, which is absolutely necessary for selling to businesses. In addition, corporate finance does not only play a financial role: it often provides market information, data, research, etc.

A fair balance

Moreover, large groups and start-ups often aim for these new relationships to be accompanied by commercial benefits substantial: the corporate thinks it can impose the product of the start-up on its sales teams, when the start-up expects to see its sales take off thanks to the support of the group. While the latter has a highly developed sales force, this is not not necessarily mobilisable for the start-up. Especially since teams may lose interest in the start-up product... or even Living it as a competition !

Certainly, there are many successes, but for equity investment to be effectively accompanied by commercial benefits, each party must have realistic expectations. In particular, the start-up must be ready to invest to help the large group's commercial network. Participation can strengthen a commercial relationship, under no circumstances can it create one. Just because a corporate becomes a shareholder does not mean it will succeed in helping the start-up. Conversely, in some cases, a commercial relationship that is too strong between the major shareholder group and the start-up can frighten the large group's competitors, and ultimately reduce the start-up's distribution opportunities.

Facing reality

Relationships between major groups and start-ups lead to Considerable challenge for France's economic future. It is therefore essential that they be productive and sustainable. But they will only be so if both parties know how to face reality: that of two worlds that are radically opposed in their practices and cultures, and which yet must learn to collaborate.

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