Startups need creativity as well as cash to ensure future success
After decades of relying on financial capital from venture-capital (VC) investors, R/GA is at Cannes Lions to announce that ambitious startups would be better off being supported by creative capital instead.
During The New Creative Capital presentation on Tuesday, R/GA executives explained how financial capital had become commoditised and therefore increasingly ineffective.
Global CEO Sean Lyons illustrated that downturn with the following figures: $293bn was invested in startups last year, a six-fold increase from 10 years ago. Yet, some 67% of all startups fail to find a follow-up round of funding or get acquired.
“While VC firms invest money for a share of the startup company, our R/GA Ventures invests creative capital, which is the exchange of creativity for business value.”
Creative capital could include elements of R/GA skills and experiences in advertising marketing, distribution, business models, people and more.
“Major brands are losing share to smaller players because consumers are not interested in what they’re selling anymore; they have alternatives on the internet,” Jess Greenwood, R/GA’s chief strategy officer, US, added.
“But ideas alone are no longer enough for startups; they need to understand how to get things out into the world.”
An example of an R/GA creative-capital investment was in ShotTracker, a wearable tech that enabled basketball teams to collect real-time statistics on each player’s performance during a game.
R/GA Ventures then introduced TV network Fox Sports to ShotTracker and artificial intelligence startup Keemotion to create the first-ever Autonomous Broadcast Network, an unmanned platform that delivers live-sports statistics to fans.