Why do corporations want to work with startups?

• Access to new technologies and innovative solutions or business models. Most startups work on innovative solutions. Some of them may be attractive from a corporate perspective. A startup may offer a technology that is not well recognized inside a corporation but may contribute to a competitive advantage.
• Access to new market trends and faster entry into new markets. Startups often are a part of the latest trends. If the trend gain popularity, it will become a vital element of the market. 
• New products and services for current customers. Startup solutions may prove to be attractive from the perspective of customer offerings. It will increase customer satisfaction. Or attract new ones thanks to solutions that stand out from the competition.
• Increase profitability and cost-efficiency. Solutions offered by startups can help optimize processes and impact business costs. Innovative services can also drop wasted resources.
• Ability to solve technical, technological, and business problems. – startups can tackle the toughest challenges. Most of them combine a fresh perspective and technology to solve even complex issues.
• Ability to adapt to new law changes. – new regulations are great opportunities to build a niche business. Any changes in the law quite often result in the emergence of new startups. Thanks to that, they can help other companies find their way into the new reality.
• Inexpensive testing of risky solutions in a controlled manner. A test implementation on a small scale can prove the usefulness of new technology.
• Improving the work of innovation and R&D departments. Startup methods may be a factor that will impact innovation-related departments’ functioning. Especially when corporate use some archaic methodologies and solutions.
• Staff development. Working with new technologies may influence employees’ competencies. Sometimes even help them to get new skills.
• Building the image of an open and modern company. Successful cooperation will attract more startups. It also has a positive impact on competing on the market for employees. Modern companies are attractive employers. Especially by representatives of the younger generation. 
• Socially responsible activities. Cooperation with startups can also be an element of CSR strategy. Especially with projects implementing solutions in the natural environment, public safety, sustainable development.
• Exploring potential acquisition targets. Startups developing crucial technology for the corporation could be attractive. The acquisition is also an easy way of secure the technology from competition.
• Acquisition of talents. To engage them to work for the corporation within its structures (Acqui-hire). Buying an entire startup is cheaper than recruiting talent on the market. In this case, startup employees are usually obliged to work for the new owner for a certain period. Most often, a few years.
• Return on investment. Cooperation with startups can have a pure economic aspect. A part of the CVC investment strategy could include ROI. And fast-growing startups could easily help to achieve such goals.

Be aware that the decision to start working with startups is only the beginning of the journey. The cooperation effects will not appear immediately. Even if such activities in the organization receive the highest priority. Entering the startup ecosystem should happen gradually. There may be dead-ends trying, which will need corporations to refine their policies in this area. Big brands have tremendous power to attract startup projects to them. But, this needs to be looked at from the perspective of building trust. And that takes years to do.