Originally published here.

By Geetha Dholakia, Portfolio Program Director, TDK Ventures

For most of the twentieth century, the gold standard of corporate innovation was the in-house research lab. Bell Labs gave the world the Transistor, Information Theory, and Unix. IBM Research produced DRAM, Giant Magnetoresistance (GMR), and many more. Both organizations produced a string of Nobel Prize-winning discoveries. In that era, these institutions had the resources to pursue basic science on decade-long horizons, in many cases with no guaranteed payoff, yet in some cases producing spectacular groundbreaking discoveries, that rewrote entire fields. This is a luxury that defined an era, a model that has largely retreated. The rise of venture-backed startups and the sheer pace of technological change made it harder to justify sprawling internal research divisions spanning long R&D cycles. The economic model shifted and corporations began looking outward instead.

Acquisitions became the most direct route, with corporations buying a startup not just for its product, but to absorb its talent, technology, and momentum before a competitor could. Google’s acquisition of DeepMind in 2014 is perhaps the defining example in AI: rather than build frontier research capability from scratch, Google purchased it wholesale. In semiconductors and deeptech, Nvidia’s attempted acquisition of Arm, though ultimately blocked on antitrust grounds, illustrated just how strategically critical these moves have become. Nvidia though, recently acquired Groq, one of our portfolio companies.

Through my podcast Strategic Partnerships Insights, I bring together perspectives from best-in-class corporate venture capital, open innovation and venture building groups. This article distills those learnings and key insights from the GCV NextWave webinar, exploring how to build the bridges, systems, and relationships needed to turn investment into enduring strategic advantage.

Staying nimble at scale: how large corporations drive innovation

Corporate Venture Capital (CVCs) offers a pathway for innovation through corporate-startup engagement. Instead of acquiring outright, corporations take minority stakes in startups operating in adjacent or emerging spaces. The model lets a corporation stay close to cutting-edge development, sometimes years before a technology is mature enough to acquire or integrate.

I’ve spent years at the intersection of corporate venture capital and deep tech, and one question keeps coming up: what actually makes a corporate engagement valuable, not just financially, but strategically, in a way that creates an equal win for both the startup and the corporate?

Over the past several months, I’ve had the privilege of exploring this question in multiple forums, hosting Shilpa Prasad, Head of Incubation at LG NOVA on the TDK Ventures Strategic Partnerships Insights podcast, joining a GCV webinar alongside Suzanne McLemore of Echo Health Ventures and Tjerk Joustra, GM of Business Development at Shell Ventures, and Susie Oblak, Executive Director of Strategic Engagement and Innovation Alliances at Merck’s Global Health Innovation Fund. Across all of these conversations, a clear picture has emerged, across different dimensions of the ecosystem of how CVC and other corporate programs create lasting strategic value for startups, distinct from those that simply deploy capital.

It starts with a dedicated bridge

At TDK Ventures, we built our Portfolio Program platform team from day one. We leaned toward hiring team members with deep technical backgrounds. TDK Ventures invests in companies that are often very different from TDK’s existing business units and operating at the very cutting edge of digital and energy transformation. Without a dedicated team, whose job it is to connect portfolio companies to TDK’s business groups, those connections simply don’t happen at the speed or depth that creates lasting value, across what is now a portfolio of 50 companies (here, portfolio companies are startups that TDK Ventures has invested in). This has enabled TDK Ventures to engage with more than 60 TDK teams across geographies and with different technology focuses. We have a matrix “Portfolio Engagement Checkerboard” that tracks how each of the 50 portfolio companies is interacting with each of the 68 TDK business units, and this is published quarterly.

Suzanne McLemore’s team at Echo Health Ventures operates with similar intentionality. Every portfolio company has someone from her Echo Health Advisors team assigned to them, people with real healthcare industry backgrounds who help founders navigate what it actually takes to sell into a large health plan. Echo Health tracks an “attachment rate,” the share of portfolio companies with at least one active contract with a Blue Cross and Blue Shield member plan, which is currently at 80%. That number doesn’t happen by accident and requires a dedicated effort to engage with the portfolio and track the strategic impact.

One practice described by Shell Ventures’ Tjerk Joustra stood out as particularly deliberate: their business development team engages before any investment is made, mapping which parts of Shell’s operations could benefit from the startup’s technology, so that the moment a deal closes, the path to deployment is already clear. “Once the investment is done, we can hit the ground running.” Beyond deployments in Shell’s supply chain, the portfolio companies also benefit from engagement with Shell’s customers, being exposed to a much broader market.

Susie Oblak’s approach at Merck reflects the same philosophy, but with a more clearly defined structural foundation. Merck’s Global Health Innovation Fund, fifteen years old, with over a billion dollars deployed across seventy-plus companies, uses what Susie calls an “enterprise coverage” model: sourcing investment opportunities directly from business leaders across the parent company, all the way up to the executive team, to identify the most pressing use cases where external technology could genuinely move the needle. “We lean a lot on their expertise,” she explained, not just to validate investments, but to ensure that strategic relevance is baked in from the start, well before a term sheet is signed.

Venture studios, though less common, offer a different model for engaging corporates and startups. Corporations co-create startups from scratch, providing capital, infrastructure, and distribution in exchange for equity. This is distinct from CVC in that the parent company isn’t just investing in someone else’s idea; it’s generating and incubating new ventures internally. Bosch, Airbus, and several large financial institutions have experimented with this model as a way to spin out innovation that would otherwise stall inside a large bureaucracy.

One of my most thought-provoking conversations was with Shilpa Prasad, Head of Incubation at LG NOVA, LG Electronics’ venture-building arm here in Silicon Valley. LG NOVA isn’t a traditional CVC. It’s a venture studio, hiring founders from the outside world, bringing them in as founders in residence, and tasking them with building entirely new businesses for LG Electronics, a $60 billion company on a deliberate journey from consumer electronics manufacturer to a solutions-oriented business.

What struck me most is how Shilpa thinks about the parent relationship. At LG NOVA, engagements with LG Electronics’ business units are treated the same as any other customer relationship. There’s no preferential access, no guaranteed internal market. “Our focus is always on creating value,” says Shilpa, “and if the value proposition is meaningful to the parent company entity, there obviously is an appetite to move forward.” That discipline is what gives the model credibility.

It also requires navigating real complexity. LG is a Korean conglomerate and the cultural and operational distance between Silicon Valley and Seoul is significant. Shilpa’s answer? Over-communicate. Feed the parent organization more information than you think they need. Build understanding before you need buy-in.

I find this resonates deeply with what we experience at TDK Ventures. TDK is a Japanese conglomerate with business groups in Japan, Southeast Asia, India, China and Europe. I’ve seen firsthand how much communication, patience, and cultural fluency it takes to build the kind of trust that enables real collaboration across that distance.

Kickstarting pilots when budgets don’t align

One of the more practical challenges in corporate-startup partnerships is one that rarely gets discussed openly: budget cycles and pilot timelines rarely align, and in challenging budgetary climates, there often isn’t a dedicated innovation budget sitting ready for non-business-as-usual work. At Merck, Susie and her team solved this by launching what they call a kickstarter pilot program, a co-funded model in which the venture fund and the relevant business unit each contribute capital to get promising pilots off the ground. Executive sponsorship from a VP who believes in the strategic relevance results in genuine skin in the game from the corporate. Roughly 70% of kickstarter pilots have converted into full commercial partnerships.

The internal champion is everything

If I had to distill one lesson from all of these conversations, it would be this: process gets you to the table, but people get things done.

At TDK Ventures, we’ve started formally recognizing TDK employees who go out of their way to initiate, champion, and scale portfolio engagements within the organization, by presenting awards at the annual 100X Portfolio Summit, presented by the TDK business company CEO. It might sound like a small gesture, but it signals something important: that the corporate values its teams actively engaging with portfolio companies on innovative projects, that bring value to both the corporation and the startup.

Shilpa described something similar at LG NOVA: LG Electronics has stationed HQ employees directly in the Silicon Valley office, with the specific task of bridging the gap between what LG NOVA is building and what the parent organization understands and believes. “Until they buy in,” she says, “until they believe in the capability of the ventures we’re incubating, having them make inroads is likely going to be superficial.”

Susie framed it slightly differently but arrived at the same viewpoint. Where Merck has seen the most traction in portfolio partnerships, there is almost always an executive sponsor, a VP who has stood behind the investment and the use case from the start. That sponsorship creates a natural pull toward commercial partnership that no amount of process can manufacture. And when executives move on, as they inevitably do, that is precisely when a dedicated engagement function proves its worth.

You can design the best process in the world, but for real needle moving impact, we need genuine internal believers or internal venture agents, corporate team members who believe in going beyond their traditional responsibilities to engage, collaborate, build, and scale on projects with the portfolios.

What portfolio companies (and corporates) actually get out of this

The first thing is traction. Pilots with a credible corporate partner prove product-market fit in a way that almost nothing else does. Shilpa put it plainly: “Pilots prove real product-market fit. And that goes a long way when we think about investing in and scaling these ventures.”

The second is credibility. When your portfolio company can point to a meaningful engagement with a large corporate, be it LG Electronics, a Blue Cross Blue Shield plan, or Shell or Merck, it brings credibility to your technology and product to you. It signals that someone with real stakes has validated your technology. It changes how everyone else sees you: Investors for future funding rounds, customers and partners for scaling into the market.

The third is access. Not just to capital, but to distribution channels, new geographic access, subject matter expertise, regulatory relationships, the kind of ecosystem that takes years to build independently. Susie described how Merck’s Global Health Innovation Fund has extended its geographic reach through MSD Idea Studios, locally based teams in Berlin and Singapore that drive investments and partnerships tuned to the specific needs of their regional markets. For portfolio companies, this translates into access to markets and relationships they could not easily reach alone.

The fourth, and perhaps the most underappreciated, is learning. Not every partnership delivers a clean, quantifiable ROI, and that is fine. Some of the most valuable outcomes are the ones that are hardest to measure or quantify. The muscles built around a new technology like physical AI, the insights that cause an organization to pivot or double down on a strategy, thereby allocating resources or personnel judiciously, are often what ultimately drive long-term advantage, especially for a corporation. These outcomes compound over time, shaping how teams think, how quickly they adapt. Organizations that incorporate early signals from engaging with startups into their technology and product roadmaps tend to be far more resilient in the face of disruptive change.

Speed. Trust. Scale.

What drives successful venture building and partnerships? Shilpa offered three words: speed, trust, and scale. In truth, they apply just as much to how CVCs engage with their portfolios as to how startups build their businesses.

Speed: the best engagement models are built to compress timelines, not extend them. The window between investment and strategic impact needs to shrink. Thoughtfully designed CVC programs achieve this.

Trust: between the CVC team and the portfolio company, yes, but just as critically, between the CVC team and the parent organization. Both relationships need investment of time and relationship building. As Susie observed, innovation partnership is not a typical vendor relationship. It requires a growth mindset, genuine collaboration, and a willingness to ask not just whether your partner is performing, but whether you are being a good partner in return.

Scale: the goal is never a single pilot or a one-off introduction. It’s a system that gets better over time. More introductions, more champions, more stories of value created that make the next conversation easier than the last and corporate teams motivated to engage as they see value.

Innovation doesn’t happen in isolation. Neither does strategic value. The CVC programs that are getting this right have understood that their job doesn’t end when the term sheet is signed. In many ways, that’s when it begins.