Josemaria Siota, the Executive Director of IESE Business School’s Entrepreneurship and Innovation Center, is a designated expert in corporate venturing at the World Economic Forum, the European Commission, and the United Nations. A management board member in several consortiums and a Harvard Business School alum, he conducts cutting-edge research on open innovation, corporate venturing, technology transfer, and scaleups. Siota has published books and studies on these topics for Harvard Business Review, MIT Sloan Management Review, McGraw-Hill, Springer, and more. He recently spoke to The Innovator about corporate venturing squads.
Q: Large corporates often find that their own R&D processes are too slow or too focused on existing business lines to keep pace with disruptive change, so they look to startups and external ventures to bring in new ideas, technologies, and business models. Hence the rise of corporate venturing as a way to hedge against disruption while keeping the core business focused on what it already does well. How successful is this approach?
JMS: Corporate venturing has tripled since 2016. However, the failure rate is 69.4% according to our IESE research published in the MIT Sloan Management Review and Harvard Business Review. As innovation challenges become more complex and systemic, corporations are increasingly turning to corporate venturing squads (CV squads) — alliances in which multiple companies work collectively with startups to move beyond isolated pilots, share startup-scouting capabilities, benefit from network effects, and accelerate knowledge sharing among corporate leaders, policymakers, and innovation practitioners.
Together with IESE Prof. Maria Julia Prats, we have been studying corporate venture squads since 2019. Since the analysis began, 671 organizations across 116 CV squads worldwide have been identified. This trend appears to respond to a growing constraint in industrial transformation. While many technologies relevant to climate action, supply-chain resilience, and industrial productivity are technically proven, they often stall at the pilot stage. This is even more of an issue in developing and emerging markets.
Q: Are there different models for CV squads?
JMS: Yes. We analyze six of them in our report: scouting forces, innovation scouting platforms, joint proofs of concept (POCs), partnerships, co-investments, and joint funds. A scouting force aims to generate deal flow for corporations, providing opportunities to identify, understand, and explore potential collaborations with start-ups. These include one-shot initiatives aimed at exploring the waters of collaborative innovations. A scouting platform aims to bring deal flow to corporations. It is the same as a scouting force, but it is recurrent over time. A joint PoC is a scenario where two or more companies collaborate with a start-up to develop or enhance a product or service in a one-time collaboration. A partnership is similar to joint PoCs but the collaboration arrangement includes recurrent PoCs among CV squad members with either the same or different start-ups. Co-investment is when companies offer investment opportunities for start-ups as a one-time deal (i.e., one investment in one or more start-ups). A joint fund, created with capital from the CV squad partners, is a structured investment vehicle that allocates several rounds in one or more startups, and separates ownership from management. Across all six models, what distinguishes a squad is not simply the presence of multiple corporate partners, but intentional coordination around a shared innovation objective.
Q: The Innovator just wrote about a CV squad, SustainTech, being formed by AstraZeneca’s BioVentureHub, Scania Group and RISE, designed to address sustainability challenges that no single company can solve alone — such as decarbonization, industrial sustainability transformation and Scope 3 emissions across supply chains. Can you give some other specific examples of CV squads?
JMS: The 100+ Accelerator – with partners like AB InBev, Coca-Cola, Colgate-Palmolive, Danone, Mondelēz, and Unilever – has backed nearly 200 startups in over 40 countries since its creation in 2018, piloting solutions tied to ESG priorities. In Sweden, MobilityXLab, founded in 2017 by Autoliv, CEVT, Ericsson, Volvo Cars, Volvo Group and Zenuity, has run 120+ proof-of-concept projects and 25 accelerations with startups from 19+ countries, some advancing to R&D integration.
An approach close to the Swedish SustainTech initiative is the one being advanced by the United Nations Industrial Development Organization (UNIDO) through its ScaleX program, which builds on emerging corporate practices and extends them into a broader, public-purpose model aligned with development objectives. Within this broader approach, ScaleX may include corporate venturing squads as one implementation track. Participating firms are expected to commit upfront to acting as early users of deployable solutions within their own operations. Deployment is intended to take place in live industrial environments, generating real demand signals and operational evidence, while structured policy and regulatory experimentation is designed to enable governments to learn alongside market actors. UNIDO is also exploring how the same venture client logic can be adapted to other stakeholders, including cities and SME clusters, where fragmented demand and risk similarly inhibit adoption at scale.
Based on our other report about corporate venturing ecosystems, we also see that in these CV squads, not only corporations but also governments, private venture capital investors, and other institutions are applying similar mechanisms. To give you a recent example in the news, the president of the community of Madrid has announced an investment of €8 million over the next four years to create an innovation hub designed to connect startups and SMEs with large corporations, investors, and public administrations to help them grow. The initiative, called the Madrid Venture Client Hub, aims to facilitate pilot programs between large entities and emerging companies and could also help enable CV squad-like collaboration over time.
Q: How effective are CV squads?
JMS: Our latest report, which draws on evidence from 51 venture squads, found that friction is the rule, not the exception. Over 90% of CV squads report at least one internal challenge, with 80% facing multiple issues at once. The report looks at where friction emerges, how challenges vary by squad type, and which cooperation-and-management choices help sustain multi-corporate collaboration over time.
Q: What are the most common sources of friction?
JMS: The most frequent sources of friction in CV squads are organizational rather than technical. The largest single challenge is partner architecture misalignment (33%), followed by internal corporate blockers (21%), and CV design mismatches (19%). Together, these challenges reflect difficulties in aligning partners, decision processes, and collaboration models as squads move from formation to execution. Legal issues (11%) and resource constraints (16%) also surface, but less frequently.
Q: What advice do you have for executives considering joining a corporate venturing squad?
JMS: Start with the why. Secondly, identify who you want to partner with and what you want to focus on. If you are teaming with multiple corporations, you will need to spend time aligning. Third, be clear about your goals. Is it access to deal flow? Is it expertise? Is it the value chain for distribution? Look for complementarity and be sure to have clarity on the governance. Think about resource allocation. How much are you going to commit? Legal compliance is important. In highly regulated sectors, when many corporations are in the same squad, you need to follow the regulations on collusion. Form a corporate venturing squad for strategic fit, not FOMO. Our data shows 33% of friction traces back to partner architecture misalignment. The real risk isn’t missing the next wave of innovation. It’s riding the wrong one, together.
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