Strategic investments give HP an eye to the future

One of the primary goals for many corporate venture capital units is to help their company capture future opportunities early. Technology change is happening exponentially around us, and no single company can compete in the world today using just internally developed technology. The successful companies of today and tomorrow, by necessity, will need to embrace open innovation and partner closely with the start-up and venture communities to leverage the full breadth and depth of technology innovation that is taking place around us.

Investing in start-ups provides companies not only with foresight about the markets of tomorrow but optionality to enter those markets by partnering with or acquiring startups to bootstrap and accelerate market entry. Investing in start-ups has many benefits to companies like HP, both strategic and financial. It’s never a choice between the two, as a good investment will have strong strategic value and returns.

Successful investing means aligning a complex array of variables. Starting with understanding the financial viability of the investment and likelihood the start-up can achieve a successful exit (via acquisition) or IPO, and at a valuation that makes the investment worthwhile. Next, you need to look at the strategic impact to the company and if the investment aligns with the vision and strategic objectives of the company. Finally, you need to negotiate terms that make sense for both and the start-up, ensuring is strategically positioned as an investor and advisor, and providing the guidance and financial backing the start-up needs to succeed long-term.

So how does a company move through this process efficiently, always keeping strategic and financial objectives in mind?

To read the full article, visit HPMegatrends.com.