High Alpha Innovation, a corporate venture studio, was founded in February 2020 under the parent company High Alpha, which was founded in 2015. It is headquartered in Indianapolis, Indiana, and has 48 employees.
Ben Roess, who oversees marketing for High Alpha Innovation, spoke with us about its collaboration model, some successful partnerships, and what leaders should ask before partnering with a studio as part of our venture studios series.
Who They Work With
Roess said High Alpha Innovation typically works with large corporations with a desire to launch external startups. The studio has worked with corporations across a variety of industries, including finance, insurance, healthcare, supply chain, agriculture, and more.
“One thing that we typically find with our partners is that they’re on the large side. They’re typically around a billion dollars in revenue; they have internal innovation structures set up. They’re essentially ready — and large enough — to be able to kind of do this kind of work,” he said.
In addition to its work with large corporations, High Alpha Innovation works with large research universities.
High Alpha Innovation has worked with Silicon Valley Bank, Capital One, Koch Industries, the University of North Carolina system, and the University of Wisconsin Madison, among other corporations and universities.
High Alpha Innovation builds external B2B software as a service (SaaS) startups with corporations and universities it partners with, ranging across a variety of industries.
“I think one of the huge benefits that’s baked into our model is that [our partners] are often customer number one once we launch the startup, solely for the reason that they can use the startup and their model to solve the problem that they initially had,” Roess said.
High Alpha Innovation has launched Anvl, a software startup focused on worker safety, with Cummins, Amplio, a supply chain risk diagnosis platform, with Koch Industries, and Transfur, AI software that helps with the veterinary care process, with the University of Wisconsin Madison, among other ventures.
High Alpha Innovation uses several major phases to build startups, Roess said — a build phase, a sprint phase, a launch phase, and an acceleration phase.
Build — in this stage, which takes about 15 weeks, Roess said the studio works closely with the innovation teams at the partner corporation to generate ideas, validate partner needs, and ensure there is a need in the consumer market.
Sprint — Once High Alpha Innovation has selected a few ideas worthy of proceeding with, it runs a sprint week on each idea. Each idea gets a brand and a pricing model, then is presented to the partner for selection and approval.
Launch — Companies that are selected out of sprint week move to the launch phase, where a founder is recruited and the company begins working with the studio for marketing, finance, and design capabilities.
Acceleration — After the launch, Roess said High Alpha Innovation supports the startup’s growth and acceleration toward Series A.
Roess said all pre-seed funding typically comes from the corporation or university partnered with High Alpha Innovation.
Once the company has hit the acceleration stage and needs seed money, Roess said, High Alpha Innovation helps fundraise from a variety of sources.
“Seed can come from any number of different places. It’s typically large VCs … High Alpha Capital often becomes involved in that,” Roess said. “We’ve also had some [startups] that do it via angel [investors]. There’s no hard and fast rule. … The initial company that invested in pre-seed — the partner company — they’re often involved in seed, too, just because they have a continued interest in getting the company moving.”
High Alpha Innovation hires a CEO for its startups who has industry expertise, as well as the personality and traits necessary — like fundraising. That person often comes from outside the corporate partner’s four walls.
“We typically advocate that the CEO that we’re recruiting is not a member of the parent company,” Roess said.
Once the CEO has been hired, High Alpha helps to recruit another team member with technology talent — whether a chief technology officer, a head of engineering, a head of product, or otherwise.
“Some of the venture studios support that we provide in the first few months are things like finance or marketing or design — things that [startups] probably wouldn’t hire until later. What we don’t have or support [startups] with is creating their product and writing their code,” Roess said.
What’s the Key Question a Corporate Leader Should Ask Before Partnering with a Venture Studio?
Roess said corporate and university leaders looking to partner with a venture studio should ask, “Are our incentives well aligned?”
He said that, by nature, the process of creating startups moves much faster than the corporate and university worlds do — and that corporations and universities should treat the process as an experiment of sorts. Without incentives that match up, it can be difficult to experiment by developing ideas into new companies.
He explained that ensuring the studio can offer the kind of innovation a partner needs is also vital to the experimentation process.
“A lot of the leaders that come to us have exhausted all the mergers or R&D or other ways that [they] can innovate. They might already have an accelerator or be investing in startups, but a studio really allows them to experiment quickly, in a way that they probably haven’t done before,” Roess said.