Corporate VCs turn to accelerators and incubators

More than one-fifth of venture dollars invested in the United States came from corporate VCs last quarter, the highest level in the history of the venture industry.

Turns out these investors did more than just write checks. In fact, they have been looking well beyond just capital for ways to bring innovation to their parent companies.

One top go-to method has been the use of accelerators and incubators. The rise of both at large corporations has been substantial in five years, to 44 percent of companies last year from just 2 percent in 2010.

The data comes from a Boston Consulting Group study released this week that examined corporate investment strategies in seven major industries: automotive, financial services, consumer goods, publishing, chemical products, technology and telecommunications.

The study found that large companies deploy a variety of tools, including hackathons, acquisitions, university scouting trips, startup co-marketing agreements and product licenses.

However, among the most popular is the use of accelerators and incubators, which is no surprise given the growing corporate interest in venture and the greatly expanded use of accelerators across venture as a whole in recent years. Accelerators and incubators, with the one principal difference being that a startup remains in an incubator for a longer period of time, obviously enable a greater depth of interaction with a corporate sponsor.

What’s interesting is the belief that successful accelerators and incubators benefit from partnerships with other corporations and independent accelerators and incubators. In 2010, only two of the accelerators and incubators had partnerships. Now, one-third of them are engaged in partnerships.

It will be worth monitoring whether this trend toward startup mentoring continues.

Photo of corporate buildings courtesy of Reuters/Mark Blinch