Managing Innovation, Design and Creativity

Chapter 22. Venturing – beyond company boundaries

In the previous chapter we looked at different approaches for infusing innovation into an organisation. All options explored rely entirely on internal funding. However, as in the GKN case study, external funding can play an important part in making innovation happen. After providing a brief overview of the spectrum through which innovation can happen and some background to the subject of venture capital, we will address the following questions:

• What are venture capitalists looking for and what to remember when negotiating with venture capitalists?

• What are other sources of external funding?

AVENUES FOR REALISING INNOVATION

For existing organisations there are a number of different avenues for pursuing innovation. Most traditional, and undertaken by all but the most stagnant organisation, is what is widely referred to as new product development. Most companies will have processes and structures in place to accomplish this.

In the introduction we have already established that most organisations have innovation firmly on their agenda; incremental improvements are no longer enough to ensure survival into the future. This comes with two realisations. First, it tends to be small start-up companies that are good at radical innovation, leading to realisation number two: it does not seem easy to pursue more radical departures from the existing through established organizational structures and processes. This is why many managers seek avenues other ...