This article is written as part of the Corporate Venture Launchpad programme. The SG$10 million pilot programme by EDB New Ventures aims to enable large, established companies new to corporate venturing to launch a new venture in Singapore within six months, supported by venture studios experienced in corporate venture building. Start your corporate venturing journey with us through the Corporate Venture Launchpad. Learn more here and connect with Rainmaking, an appointed venture studio of the programme here.

I am a father of an eight-year-old girl and a five-year-old boy. Being a parent puts me in several paradoxical situations; being friendly yet strict, critical yet supportive, adventurous yet cautious, and creative yet pragmatic. It all sums up in the age-old parenting paradox of holding tight and letting go.

As a corporate venture builder, I see corporates experience the same paradox of holding tight and letting go while building corporate ventures.

Step back and take a critical look at these two words in isolation: they are a contradiction.

At one end, we have corporates who are all about holding tight. They have a well-defined business model, a well-established set of business processes, a well-oiled method of deploying resources, and a well-evolved set of values and metrics that matter to the business.

On the other end, we have ventures who are all about letting go. By their very definition, ventures are amorphous, still discovering a business model, identifying the talent needed, defining their processes, and aligning on the metrics they should track.

How might we, the corporate venture builders, who transform an idea into an investable venture, bring these two universes together to create a strategically aligned corporate venture, a venture where the corporate is excited to invest its resources and can attract founders who are excited to invest their time and energy.

The keywords here are ‘strategically aligned.’ And therefore, the need for defining investability criteria.

Let us take screentime as an example. As a parent, I need to be strategic about how my children use screen time as it is inevitable.

I need to align with my partner on the objectives and boundaries for screentime while creating an environment for creativity, curiosity, and courage.

It is about us maintaining the paradox of holding tight while letting go because driving creativity, curiosity, and courage requires defining inspiring yet attainable objectives and outlining less constraining boundaries within the lines that we as parents are unwilling to cross.

Also Read: Why it maybe the opportune time to consider Corporate Venture Capital

Investability criterion is the paradox that corporate venture builders need to design and deploy from day one to ensure that the time, resources, and efforts are invested to focus on creating a strategically aligned corporate venture for the corporates and the founding team.

So, how should corporate venture builders think about investability criteria? It is a four-part process:

Step 1: Understand the stakeholders and their needs

As parents, we discussed why our children need screen time. We outlined the gives, gets, and risks and aligned them to our parenting values.

Invest time to deeply understand the corporate’s and founders’ needs across three dimensions: metrics, risk, and urgency.

Step 2: Define and align on the venture objectives

Think of this as setting the development objectives for the child. For us, the development objective of screen time was about triggering curiosity, learning new skills, and building self-control.

Think of objectives as the ultimate strategic and business goal the venture is designed to deliver. The objectives need to be SMART: specific, measurable, ambitious, realistic (therefore achievable), and time-bound.

Step 3: Define and align on the boundary conditions

Think of this as parents defining the rules and boundaries for the child. It is more than simply saying “No” or “Yes.” It is about creating the space for the child to explore, take risks, experiment, and build accountability.

For our children, the boundary conditions for screen time are listed below. And as a reward for self-control, our children get to watch a movie of their choice every Friday night.

Define the corporate venture’s boundary conditions across a matrix (below) of what the venture must, maybe, and must not do in terms of venture desirability, venture feasibility, and venture viability.

Step 4: Reference and iterate

Parenting is an ongoing process and requires continuous adjustments to reflect the interplay created by the objective and boundaries set.

The screen time criteria for our children have evolved since we set it because now my daughter is keen to get better at chess and wants to learn new songs to play using the guitar. At the same time, my son wants to learn about animals and learn the lyrics of his favourite songs.

Also Read: 5 things startups should know about Corporate Venture Capital

Similarly, investability criteria must be viewed as a line drawn in the sand and not as rules set in stone. And therefore, corporate venture builders must reference the investability criteria to inform the decisions taken during the formative stages of the venture and continuously review and shape them to reflect the new realities. It is not a one-time process.

Corporates, corporate venture builders, and founders must invest sufficient time in the first three steps to achieve maximum stakeholder alignment.

We must also dedicate time to step four throughout the venture building process. Achieving strategic alignment is like tightrope walking. Corporate venture builders need to be mindful to strike the right balance between aligning the corporate’s and founders’ aspirations and constraints.

Ultimately, as with the parenting paradox, objectives and boundaries must enable the founding team to take risks, fail often, and eventually thrive. And like parenting, this is an iterative process.

It is these paradoxes that make parenting and corporate venture building so challenging yet so rewarding. So the question is, how can you “hold tight and let go” in your organization?

To learn more about these steps, please watch this short video.

This article is written as part of the Corporate Venture Launchpad programme. The S$10 million (US$7.5 million) pilot programme by EDB New Ventures aims to enable large, established companies to launch a new venture in Singapore within six months.

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