Definition of Venture Client
A Venture Client is a company that engages in buying and using solutions from startups to gain a strategic advantage. The term “Venture” Client stems from the inherent higher risk associated with a startup (aka “a venture”), as opposed to an established company. This risk is willingly undertaken due to the startup’s product offering a more effective solution to a strategic problem than existing internal and external resources. A problem is considered strategic if it has a direct impact on the competitive stance of the Venture Client company.
The concept of the Venture Client was initially coined and popularized by Gregor Gimmy (see Wikipedia).
Key Differentiator of Venture Client versus CVC
The approach of a corporate Venture Client is notably distinct from that of a traditional Corporate Venture Capital (CVC) investor. While both aim for strategic benefits, a Venture Client achieves this by directly purchasing and using a product from a startup, without the necessity of investing in the startup. On the other hand, a corporate Venture Capitalist seeks strategic advantages through a non-controlling equity investment in the startup.
Examples of Venture Client companies
Prominent examples of companies with dedicated Venture Client Units include the BMW Group (BMW Startup Garage), Holcim (Holcim MAQER), and Bosch Group (Open Bosch).
To be a good in Venture Clienting, companies need a good Venture Client Model. Learn about Venture Client Models in this article.
Video: What is a Venture Client?
For a succinct explanation of Venture Client, watch this video featuring Gregor Gimmy providing an overview of the concept.
What is a Venture Client?
The concept of a Venture Client is actually quite straightforward. It refers to any individual or organization that purchases and uses a product from a startup (aka a ‘venture’). This term was coined by me in 2014 during my tenure at BMW to encapsulate the inherent risks involved in engaging with startups compared to established, incumbent companies.
When you buy from a startup, you’re often dealing with products that may not be fully certified, are less mature, and not as thoroughly tested as those from more established companies. Furthermore, there’s an added element of risk due to the nature of startups themselves. These companies are often in their nascent stages and carry a higher risk of failure. As a result, if you purchase a product from a startup, there’s a chance that the company might not exist a few years down the line. This heightened risk for the client is the reason behind the term ‘Venture Client’.
This concept underscores a more adventurous approach to filling resource gaps, where organizations embrace the uncertainties of engaging with startups to access innovative, cutting-edge solutions that are not available through traditional internal or external resources providers.