We’ve entered “Mark III” of corporate venture, where startups and corporates must collaborate rather than compete to survive disruptive waves. 
Corporate Venturing Insider spotlights voices across corporate venture to uncover practical ways corporates can support entrepreneurs. Part of our ongoing exploration has been to check in with leading academics investigating corporate venturing—helping industry practitioners broaden their awareness of the different mechanisms at play and giving entrepreneurs perspective on what levers may already exist within corporates that they can recognize and collaborate with.
Valery Yakubovich, Executive Director of the Mack Institute for Innovation Management at the Wharton School of the University of Pennsylvania, is the latest in a line of 20 academics we’ve interviewed over the five-year run of this podcast. Alongside colleagues such as Gary Dushnitsky—a global expert on corporate venture capital interviewed by this podcast in 2022—and Wharton Senior Vice Dean Serguei Netessine, who published an earlier report on corporate venture while at INSEAD, Yakubovich co-authored a major new study: When Goliath Needs David: How Corporations and Startups Are Redefining Corporate Venturing (June 2025).
In episode #112, Nicolas Sauvage, President of TDK Ventures, sat down with Valery to unpack the report and its research.
From Creative Destruction to Creative Collaboration
The report frames today’s CVC practices in a century-long arc. It begins with Joseph Schumpeter’s original “creative destruction” theory (Mark I), which described startups sweeping away incumbents with breakthrough technologies. After World War II, Schumpeter revised that view, pointing to corporate R&D labs as engines of innovation (Mark II).
Today, Yakubovich and his co-authors argue, we are in “Mark III” of corporate venturing: a phase defined not by startups disrupting incumbents or corporates dominating innovation, but by collaboration.
“Neither startups nor large firms are taking over whole industries,” Valery said. “Instead they are figuring out how to adjust.”
Automakers facing the rise of electric and autonomous vehicles are a prime example. Many expected Tesla to completely reshape OEM manufacturing models. Instead, legacy players have found ways to reinvent themselves while working with startups across the ecosystem. Similarly, Valery points to OpenAI’s relationship with Microsoft as a prime example of collaboration.
Why Goliath Needs David
The title of the report—When Goliath Needs David—is no metaphor. For many startups, especially outside the U.S., corporates and state actors are the default source of funding.
“If you go beyond the U.S. you don’t see such a vibrant VC ecosystem,” Valery noted. “Corporate and state capital is actually the default for startups.”
At the same time, corporates need startups because the speed and cost of modern technology development overwhelm in-house R&D.
“Even when your business is actually running smoothly, you still don’t see where threats are,” Valery explained. “It is hard to justify suddenly spending resources and major investment on something different that might compete with your existing business.”
For startups, corporate partners bring more than capital—they are often the first big clients. “They’re the customer startups can experiment, pilot, and develop their product with, even if it’s not yet perfect,” Valery said. This allows both sides to test technologies in real-world conditions, creating a symbiotic relationship.
Six Goals That Anchor Corporate Venturing
The Mack Institute study identifies six recurring objectives corporates pursue through venturing:
- Risk management – hedging against disruption.
- Market expansion – entering new segments or geographies.
- Access to new technology – scouting and testing cutting-edge ideas.
- Business ecosystem development – building communities of complementary partners.
- Social and environmental impact – diversifying supply chains, supporting minority founders, and investing locally.
- Cultural and intrapreneurial development – exposing employees to entrepreneurial mindsets.
Notably absent from this list is financial return.“Financial gains and learning new technological spaces bring them in. However the majority of companies say they need strategic reasons to do corporate venturing,” Valery explained.
Innovation Levers & Impact
One of the most practical contributions of When Goliath Needs David is its emphasis on the spectrum of corporate venturing levers, from lightweight entry points to heavier commitments. Corporates don’t need to begin with nine-figure CVC funds. As Valery Yakubovich explained, “If you are curious but inexperienced, start by inviting startups in. Sponsor a hackathon, offer workspace, provide discounted services, or share mentorship. These cost little, but they create invaluable learning opportunities on both sides.” Such low-cost steps—mentorship, business services, shared workspaces, and events—also help overcome cultural distance by giving employees informal exposure to entrepreneurs.
Beyond these lighter levers, the report highlights four “heavier” models: CVC arms, accelerators and incubators that cultivate synergistic startups, venture building where corporates spin up entirely new ventures, and venture clienting. Valery sees the latter as especially promising: “It is spreading fast, especially in Europe. By acting as a client, not just an investor, you validate startups, de-risk your supply chain, and sometimes even create new markets for your own products.” Still, he cautions, “Keep it close to the line business, not the CVC team. Sales leaders must see the value and have incentives to support it.”
The study also underscores how venturing can deliver impact and culture change. Valery pointed to corporates in Africa opening incubators for local businesses and U.S. firms creating hubs for minority entrepreneurs. “Established companies attract people who like certainty,” he said. “When you expose your internal workforce to entrepreneurial activities, they learn. Some discover a taste for it, and gradually you change the culture.” This creates intrapreneurs within your company.
What’s Next: AI and Digital Twins
Looking ahead, Valery predicts that corporate–startup ties will only deepen as artificial intelligence reshapes venturing. Nicolas shared one striking example: “I recently met a team that told me they had 22 team members, but 19 are human and three are AI agents.” For Valery, this points to a future where venture building becomes faster and cheaper, with ideas launched and tested through AI before expensive teams are hired.
He is also preparing for the Mack Institute’s upcoming conference on “digital twins of startups”—simulations that model whether a business idea can work digitally before building in the real world. “It could change how corporates experiment with venturing,” Valery said, “making it possible to de-risk innovation at an entirely new scale.”
When Goliath Needs David makes clear that corporate venturing is no longer an experiment at the edges of business—it is a core strategy for growth, resilience, and survival. The next frontier may well be powered by AI and digital twins, but the message today is simple: corporates and startups need each other more than ever.
