Corporate Problem

  • Corporates globally spend $1.6 trillion on internal R&D and yet…
  • Corporates still spend $4 trillion on M&A mainly to acquire innovation
  • Returns on innovation driven M&A is poor – so turning to investing
  • CVC’s spend $40bn pa focussed on strategic Series B+ deals (pre M&A)
  • BUT, existing VCs don’t typically want a strategic CVC involved as it affects the exit
  • CVCs missing early-stage investment

Corporate Solution

Whitespace sees huge benefit from a Corporate / Start-up engagement

  • Whitespace offers Corporates programs to engage with Start-ups
  • Whitespace sees this as beneficial to start-ups where it is sales focussed
  • Whitespace can identify strategically interesting start-ups to engage with
  • Whitespace and the Corporate carry out detailed due diligence
  • The Corporate engages the Start-up with their Business Units

An example of Whitespace’s corporate engagement is Cisco. Whitespace manages Cisco’s EIR program in London. Whitespace and Cisco identify potential strategic start-ups that will be accelerated by Cisco’s Business Units. Whitespace and Cisco carry out detailed technical, commercial and financial due diligence and the start-ups then go on a six-month fast-track approach within Cisco. Each start-up is potentially strategic for Cisco and therefore a potential investment and/or acquisition.

Corporate Value-add

Whitespace can also bring in other Corporate partners to accelerate the Start-up

  • Whitespace can also lead investment rounds and make available to Corporates
  • Rather than trying to lock CVCs out of making strategic investments Whitespace actively encourages it

Corporates can engage early with strategic start-ups and then carry out detailed due diligence (technical and market) and then make small investments as engagement develops. As the relationship develops and the start- up works with the Corporate the position can develop to a less risky acquisition improving M&A returns.

Corporate Services

Whitespace charge fees for dedicated engagement programs (e.g. an Accelerator, EIR Program)

Whitespace charges fees for managing spin-out programs and for building companies in our Lab

There are no co-investment fees except the usual 3% exit fee