MIT Sloan Management Review Article on The Three Internal Barriers to Deep-Tech Corporate Venturing

The flow of capital to deep-tech startups is rapidly becoming a torrent. From 2016 to 2020, annual investments in startups focused on commercializing emerging technologies such as biotechnology, robotics, and quantum computing grew in value from $15 billion to $60 billion worldwide, with the average private investment more than tripling in size. Deep-tech corporate venturing (CV) — the second-largest source of this funding — grew from $5.1 billion in 2016 to $18.3 billion in 2020.

The intent behind these deep-tech corporate investments is clear. In theory, deep-tech CV enables companies to quickly gain expertise in leading-edge technologies and pursue potentially disruptive innovations without building internal capabilities from scratch. In reality, however, such funding can come with high hurdles, such as time-to-market durations that often exceed five years, and the greater risk inherent to novel and complex technologies.

About the Author

Josemaria Siota (@josemariasiota) is executive director of the Entrepreneurship and Innovation Center at IESE Business School. Maria Julia Prats is the Bertrán Foundation Professor of Entrepreneurship at IESE Business School.

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