April 19, 2023

Why corporate contracts matter — and the reality of securing them

In bleak market conditions, how can startups secure corporate contracts for growth?

Aruni Sunil

5 min read

Sponsored by

Wayra Telefónica Innovation UK team

VC cash is a great way to kick off a startup, but if you want to sustainably scale, you need revenue. 

Corporate venture capital (CVC), a form of startup financing which made up more than a fifth of all European VC rounds in 2022, is one way to get there — but securing a deal and getting the most from the partnership isn’t easy.

So we asked the experts just how corporate contracts can help — and how realistic it is to secure them. Here’s what we found out.


1/ When's the right time?

With VCs tightening their purse strings and focusing more on profitability, experts say that the current downturn could be the right time for startups to secure corporate contracts. 

In addition to capital, the credibility of working with a corporate can act as a stamp of approval for potential customers — and practical advice and support from in-house experts are attractive for startups looking to boost revenue.

“Corporate contracts are the best way to prove product-market fit which all the startups are striving towards,” says Thomas Bastien, head of partnerships at Wayra UK, Telefónica's innovation arm that unlocks business opportunities between corporates and startups.

“And as startups grow, investment decisions become more metrics-driven, and then these commercial contracts become even more important because they are the ground truth about if your business is successful or not.”

2/ A win-win for startups and corporates 

Successful partnerships don’t just benefit startups. Corporates need to innovate to stay ahead of competitors and disruption and access new technology — which can be gained from partnerships with startups. 

But corporates can be reluctant. Bruno Moraes, managing director at Wayra UK, says that from the corporate’s perspective, reducing the risk of investing in a startup is most important: “We need to reassure the corporate that working with the startup is not risky.”

He adds that the risk appetite is lower with corporates, so “the startups raising CVC are usually from Series A onwards, even though there are exceptions — they should have a proven product-market fit, a few clients, the processes already set up and established, and sometimes the certifications needed too”.

Moraes says that the process can be a bit of a “virtuous cycle” because with more important corporate logos on a startup's client lists, the perceived risk reduces substantially — and then it becomes increasingly easy to get even more clients and investment.

3/ Picking the perfect partner

It’s key for founders to do their due diligence, as with VC investments, to make sure that the type of partnership, business objectives and product roadmap are all aligned with those of the corporate.

There are different types of partnerships with corporates which can help startups grow — and founders can also decide to onboard corporates as clients instead of investors.


Irra Ariella Khi, a serial entrepreneur and cofounder of digital travel identity platform Zamna, part of Wayra UK’s portfolio, says that she would opt for having corporates as clients instead of investors in most cases.

“Having said that, having a corporate on your cap table, like we've got Wayra, is an endorsement at a very early stage before you get your bigger clients,” she says. “So early on, raising venture capital from a corporate is a really smart thing to do if that fits your product roadmap.”

Bastien says that founders should also make sure that the corporate is on the same page as the startup on the problem that they’re trying to solve. 

“A lot of the time we see companies not getting past that barrier to be adopted more generally across the corporate, because their product is a great demo, but more of a nice-to-have and not a painkiller solution,” he says.

It’s also crucial to bridge the cultural gap between startups and corporates as the two often have vastly different styles of working and expectations on factors like timelines, communication and the appetite for risk may vary.

“The decision-making timeline is sometimes extended in a corporate because of planning and budgeting cycles. Quite often there are changes in the organisation, in responsibilities or changes in priorities that may leave a startup hanging,” says Moraes. 

To this, Bastien adds that the best startups will not wait around indefinitely for corporates — so at Wayra, they try to make sure that the “integration of the startup within the corporate is going as fast as possible".

“It's not fully frictionless, but that's something we strive to do by eliminating a lot of the steps that are usually taken to onboard a vendor.”

4/ Securing the contract

There has been a steady increase in corporate–startup engagements. Between 2013-19, there was 32% year-on-year growth in corporate venture capital (CVC) investments, and three quarters of Fortune 100 companies have active venture units.

Moraes says that it’s key for startups without prior corporate partnership experience to at least have a pool of potential clients who are interested in their product so that market interest can be showcased to potential CVCs. 

Corporates don’t partner for the sake of PR anymore, says Khi: “Your value proposition should be solid if you want to be heard.”

She adds that if a startup has a corporate client, it’s important for all teams within the corporate — from C-suite to junior employees — to see value in the product, essentially making it indispensable. 

She also suggests that for both client partnerships as well as CVC, it’s important to have strong legal advisers to make sure that the terms are reasonable.

“Never, ever take the first offer — negotiate, negotiate, negotiate. Know your value, know your assumptions, be able to defend them, negotiate your valuation, your price point, negotiate always and create more evidence and more traction-based proof of why your value is what it says it is.”

If you want to innovate efficiently with startups or unlock commercial traction with corporates, get in touch with Wayra UK.

Aruni Sunil

Aruni Sunil is a writer at Sifted. Follow her on Twitter and LinkedIn