Concept for Effective Identification and Initiation of Startup Investments for the Digital Transformation of Manufacturing Companies

The digital transformation is fundamentally disrupting established business models and existing value chains at an accelerating pace. Faced with multidimensional and inevitable changes, many incumbent companies lack necessary competences, processes, and structures to actively transform their business with sufficient speed and extent. While successful tech-companies therefore consequently rely on startup acquisitions, investments or cooperations, most incumbent manufacturing companies are not successful in systematically leveraging external corporate venturing as a catalyst for their digital transformation. Several reasons may already be found in the early phases of an investment. This applies especially to the identification of suitable startups, the determination of the potential value contribution of an investment, and the effective initiation of startup investments. Against this background, this paper presents a concept for effectively identifying and initiating external corporate venturing initiatives for the digital transformation of manufacturing companies. Thus, existing approaches in literature are discussed and analyzed to derive the requirements for developing a concept, which enables effectively identifying suitable startups for digital transformation objectives and subsequently initiating an investment. Based on these findings, the methodology and its sub-models are derived.