SINGAPORE (Dec 8): Locally listed corporates such as CapitaLand and DBS Group Holdings are jumping on the bandwagon and getting involved in helping startup companies.

Distributing goodies to startups — everything from office space to funds and exclusive access to their distribution networks — has become de rigueur among corporates.

According to KPMG Singapore, at least two in five enterprises in Singapore have an accelerator, incubator, venture fund or some kind of programme which through which it engages startups.

Startups say that these corporates can give them a leg-up, providing them with the credibility they need to approach new clients or with an opportunity to sign commercial deals with major enterprises.

However, there are downsides to hooking up with a corporate too.

Businesses may risk becoming complacent after obtaining seed funding to support their operations. They may end up not fully focusing on building a good product or a strong foundation for future growth.

Furthermore, advisors at corporate accelerators often have no experience in setting up a business as they themselves have never started one before.

Some corporate innovation programmes may even have ridiculous term sheets and non-compete or info sharing clauses.

To be fair though, most corporate accelerators are still finding their way in the startup space. But it is likely they will be the dominant driver for startup growth soon.

To find out more, get issue 809 of <i>The Edge Singapore</i> (week of Dec 11) which is on sale now.

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