There is a growing interest from larger corporates to engage with innovative start-ups that operate within specific sectors as most large firms are not able to innovate quickly enough to meet the ever-changing demands of their customers. SMEs who are operating in the value or supply chain of larger corporates can also try and approach those companies, as there are opportunities for outsourcing and the development of strong business relationships. Corporates support start-ups or SMEs through corporate social responsibility and integration into supply chains.
The fundraising process and amounts will vary depending on the type of funding that corporates provide. When companies are funding other companies and projects via their CSR initiatives, they will often act like impact investors. This means that they are not only asking for a business plan, but also a way to monitor how the money is being used, and whether it is meeting its stated social and environmental goals. Otherwise, corporates will look at how the business they invest in could grow and how this growth may fit into the company’s long-term plans. While corporates can be a great partner for your start-up, make sure you protect your intellectual property (IP) before opening up any business secrets.