A Hybrid Innovation Model for Innovation.

A proposal to improve the ROI for corporate assets and reduce risk for venture capital.

Innovation is difficult. A review of venture capital returns is far from compelling*. Corporate investment in R+D has been known to incite anger from shareholders as they express concern over the perceived risk and ROI.** (US) government funding is facing significant budget pressure and uncertainty. And yet the predominate answer to the current economic conditions is "innovation". What does that say about the future viability of our country if this is truly the case?

This is a complex problem, that may find a potential solution in a "hybrid innovation model". The fundamentals of venture capital and corporate investment are reviewed for pros & cons and a scenario proposed to leverage the strongest elements of each.

There has been a discussion with a few more progressive VC firms and some precedent with select corporate strategies. Risk is managed, funding leveraged, innovation accelerated and growth opportunities are multiplied for each partnership.

The business model has the potential to be quite complex if each party is out to maximize their share at the expense of the other. A possible solution may lie in a "blended" portfolio with the hybrid contributing a % of the total return for each party. Additional transitions can be designed at certain milestones to suit each parties interests and keep the focus on a successful outcome.

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