What we do – Spinup and Spinout

Give your new ventures wings and jet engines

If you are a company who is established and has an innovative spirit, your engineers and your business folks may have developed new ventures that could scale into successful enterprises of their own. Such new ventures could be kept in-house and nurtured, if the political environment and corporate sustenance permits it and can give the new venture the best chances for growth and success.

If not, you may consider spinning out the venture as a separate company.

When innovation teams in existing businesses, build new ventures, they need to answer a simple question: “Does it make more sense to keep operating and growing this new venture internally or would they do better as a standalone, separate entity?”.

Feisal Mosleh, former Director, HP Venture Fund

Many businesses have created successful spinouts and our principals were involved in some of these, sometimes in the eye of the storm and sometimes more peripherally. Many lessons were learned in the assessment of the spin-up or the spinout and execution of multiple phases, such as: strategy, approval (permission to go), formation, growth, scale, IPO and possibly re-acquisition.

Examples of spin outs

In 1999, Hewlett Packard spun out Agilent technologies a $10B + independent venture. In 2005, Agilent technologies itself spun out its semiconductor venture into a $2B company called Avago technologies, which went public. Google Spins Out Self-Driving Car Company as Waymo

Many businesses have created spin-out companies. After Netflix decided to not build its own player device, it launched a new company, Roku in 2008.The now famous Roku, whose stock went to $150 and more in the late 2019 time frame was the Netflix Box division of Netflix.

Some benefits of spinning out a new venture

  • Independence. Freedom in running and going after new markets and customers, unencumbered by the leash of existing corporate rules and constraints. Going after markets occupied by major customers or partners can become a severe constraint for
  • Access to investment capital. Access to venture capital or private equity or even public markets becomes more available.
  • Freedom to move faster. Startups have a small team that can be lithe and agile and move at light speed compared to its mothership.
  • Attracting the right talent and teams. Large companies can have a hard time attracting the right people. Some startups though can create the right packagesto attract entrepreneurial, experienced business builders and growth execs. Significant incentives can be realized, unencumbered by existing employment reward policies

Concerns that may be avoided via a spin out

  • Regulatory hurdles can be avoided
  • Competing against partners
  • Competing against customers
  • Attracting talented growth executives

How can we help?

  • Provide a non-biased objective assessment of your new venture and your options.
  • Act as an independent, experienced, team who can provide a recommendation and get everyone on board to move forward
  • Prepare a spinout execution plan across a large, matrixed organization, working closely with the C suite, GMs, LOB managers and other stakeholders
  • Provide a seasoned team of execs who have spun out and spun-in and spun-up ventures to help you execute the plan.

Contact us for an initial evaluation.