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More corporates than ever want to work with start-ups, a study discovered. The report titled The State of Startup/Corporate Collaboration 2016, from accelerator programme MassChallenge, interviewed over 200 start-ups and 100 corporate bodies (including Cisco and Microsoft).

The study highlighted a “fundamental mindset shift” in the relationships between new businesses and corporations.

82% of the corporates surveyed believe start-ups are “somewhat important” to their company strategies, while 23% said they were “mission critical”.

More corporations also prefer working with start-ups who are in their early stages, with 67% of those asked saying they prefer to work with start-ups in their infancy, in order to “explore new technologies and business models”.

Companies working with start-ups relish the innovation and fresh ideas that entrepreneurs can provide, and are only now recognising the potential this has to help larger companies. Start-ups also have the ability to step back and look at the bigger picture that corporations often miss, leading to new approaches and more flexible ways of working.

This desire for corporate start-up engagement hasn’t just been adopted by large companies. 99% of start-ups hoped to work with corporates in the future, with their main priority being collaboration.

For entrepreneurs, working with a larger company can open the door to new investment, invaluable industry contacts, and a reputation in the market.

Despite the enthusiasm to work together, the majority of corporates surveyed said that efforts to work with start-ups are currently underfunded.

MassChallenge president, Mike LaRhette, said: “Because the start-up/corporate relationship is starting much earlier than it had previously, entrepreneurs are finding that they can uncover a more strategic value.

“More and more corporations are entering the brave new world of engaging with very young start-ups.”

Avoiding IR35

While working with large corporations can boost a start-ups prospects, it’s important to know about the tax legislation that could have an effect on your work.

IR35 is the piece of legislation that determines if a worker is defined as an employee, or as an independent contractor. Terms in your contract may mean you’re at risk of being within IR35, so it’s best to check with an accountant.

If you’re worried you might fall under IR35, you can find all the details you need to know in our handy guide. Alternatively, you can give one of our advisors a call on 020 3355 4047.

Are you a start-up working with a corporate company? We want to hear about it! Leave us a comment in the section below telling us how you found working with a corporate company – the good and the bad!

About The Author

Kara Copple

An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.

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