Highline Beta is a corporate venture studio and venture capital firm founded in June 2016. The firm, located in Toronto, Ontario, has about 30 employees and works with corporate clients to create solutions to launch new ventures.
As part of our deep dive into the world of venture studios, we spoke with Marcus Daniels, Highline Beta’s Founding Partner and CEO, to find out more about the firm’s collaboration model, financial model, corporate partners, and more.
Who They Work With
Highline Beta tends to work with corporates in the Global 1000, according to Daniels. Mostly, the corporations Highline Beta collaborates with fall into the consumer packaged goods, financial, banking, insurance, and manufacturing industries. For Daniels and Highline Beta, the corporation’s interest in broadening its core matters greatly, too.
“We like to work with companies that are looking to grow beyond their core business with new business models and value propositions,” he said.
Highline Beta has worked in partnership with Anheuser-Busch InBev, Colgate-Palmolive, Avery Dennison, American Family Insurance, Intuit, and RBC Royal Bank, among others.
Outcomes
“We exist to build and invest in new ventures where we share the risk and the upsides,” Daniels said.
He said Highline Beta can help its partners with several types of projects — spin-ins, spin-outs, and pilot accelerators.
“Our model delivers a lot of optionality, where the solution could be building a startup completely on the outside [of a corporation], or could lead to a new business division being created [internally],” Daniels said.
Highline Beta has launched projects like Mydoh, an internal venture, with RBC Ventures; Relay, an external venture, with American Family Insurance; and the 100+ Sustainability Accelerator with Anheuser-Busch InBev.
Collaboration Model
Highline Beta helps its clients with three major facets of innovating for corporations: discovery, validation, and building.
The discovery stage helps figure out what the opportunities are and where they have the right to play. From there, Highline Beta helps clients build minimum viable products and test them in the marketplace. Once the product is validated, Highline Beta helps determine the best structure for the new venture building process, whether internal, external, or a pilot accelerator.
Throughout the process, Highline Beta collaborates through a hands-on approach with its corporate partners.
“We bring unique, external talent to each venture that we build and invest in,” Daniels said. “Unlike traditional consulting firms, we exist to earn equity interest or create co-investment opportunities in new businesses, as opposed to traditional professional services.”
Funding
When Highline Beta works with a corporation, the funding for the venture depends on the way it’s been set up.
When the firm helps a corporate client to create a spin-in, or internal project, the corporation pays for the entire project, because the corporation 100 percent owns the result.
In the case that Highline Beta is working with a corporation to create a spin-out, or external project, they help to fund the venture alongside the corporation and other investors.
“We are institutional venture capitalists that fund at formation and follow on as the venture scales,” Daniels said.
Team
During the discovery and validation phases, the strategy and research arms of Highline Beta’s team take the lead. Once the project moves into the building phase, the venture studio building team and the product team enter the arena.
“Our diverse team does the work and takes the responsibility from zero to one to launch new ventures. Highline Beta recruits and brings in unique entrepreneurial talent to launch and scale new corporate ventures,” Daniels said.
He said Highline Beta typically hires a founding team of two to three to build new ventures for a spin-out venture. The founding team has a CEO and someone who can help build the product.
What’s the Key Question Corporate Leaders Should Ask Before Partnering with a Venture Studio?
Corporate leaders need to ask themselves, “Do you have the resolve to build and invest in a new venture that is further away from the mothership?” Daniels explained.
“New venture building needs the freedom to operate independently from the core business to allow it to harvest the most of the emerging opportunity,” he said. “These ventures address long-term horizons that need the air cover to get to product-market fit. Does the organization have the desire to support development and growth of new ventures beyond the core over medium to long-term horizons?”
