We've all seen this movie before. Massive corporation realizes it's getting disrupted by startups, but has no internal technology launchpad. Said corporation panics, throws money at consultants, builds shiny "innovation labs" with ping-pong tables, and... absolutely nothing happens. Rinse, repeat, fail. But BASF—yes, the German chemical behemoth that's older than electricity—actually figured out how to crack the corporate innovation code. And their secret weapon? They basically handed the keys to a bunch of outsider entrepreneurs who had never touched a test tube in their lives.
Chemovator was closed down in July 2025 when BASF essentially decided to move its core business to China. But learnings and best practice need to endure if corporate venturing wants a chance at succeeding.
The Setup: When Corporate Meets Chaos
Picture this: It's 2018, and BASF executives in Ludwigshafen (a German industrial town that makes Cleveland look cosmopolitan) are staring at a problem. They've got brilliant chemists, massive R&D budgets, and enough IP to paper a small country. But in Digital, they're moving at the speed of, well, a 158-year-old corporation. Meanwhile, startups are eating everyone's lunch with business models that traditional companies can't. It was Markus Solibieda, back then the freshly-appointed head of BASF VC, who had what can only be described as a "hold my beer" moment. Instead of hiring McKinsey or building another corporate incubator staffed by MBA-wielding internal "innovation catalysts", he did something genuinely radical. He called up Christoph Raethke, a Berlin-based entrepreneur who had been running his angel-based accelerator, Berlin Startup Academy, since 2012. Basically, BSA was a network of 100+ battle-tested startup veterans, ready to mentor new startuppers. And here's where it gets interesting: these weren't chemical industry people. They were complete outsiders. "We need entrepreneurs," Solibieda essentially said. "Real ones. Not consultants playing entrepreneurs."
The Gang of 12: Corporate Innovation's non-corporate operators.
What BASF built with Chemovator was like nothing anyone had seen before—a corporate incubator run by actual entrepreneurs who had very little connection to the chemical industry. The setup was beautifully simple and completely insane:
· 12 experienced entrepreneurs became "Entrepreneurs in Residence" (EiRs)
· Each one dedicated just 1-5 days per month to Chemovator
· They got voting power on which ideas made it into the program and which kind of support they needed
· Based on their belief in individual ventures, they were free to invest their own money as angel investors
· When teams changed or imploded (which happens when corporate employees meet the reality of startup pressure), they stepped in as interim CEOs
· And here's the kicker: they operated on a daily rate system with no predefined budget. No corporate salary. No agency fees or overhead. No allegiance to quarterly earnings calls. Just pure, mercenary-level entrepreneurial firepower.
The Flexible Payment Revolution
Most corporate innovation programs work like this: "Here's your annual budget for external advisors. Try not to spend it all in one place." BASF said "nah" to that entire concept. Instead, each EiR invoiced monthly for actual days worked. Need extra help during a critical pivot? Scale up. Team's cruising and doesn't need handholding? Scale down. It was like Uber for startup mentorship—pay for what you use, when you use it. And that flexibility worked both ways. When the EiR’s own startups or other commitments required full attention, they could reduce or pause their involvement in Chemovator. This wasn't just cost-effective; it was alignment magic. When your advisors only get paid when they're actually adding value, suddenly everyone cares about results.
The Berlin Connection: How to Buy Street Cred
However, here's a problem every corporate innovation team faces: How do you access real entrepreneurial talent when you're headquartered in Industrial Nowheresville? Most companies solve this by hiring consultants who, in turn, will hire a few former startuppers to raise credibility. BASF found option b): strategic partnership with the existing startup ecosystem. By inviting Christoph Raethke to open up his network of founder-mentors, they instantly plugged into a network of proven entrepreneurs. No need to build relationships from scratch. No need to figure out who's legit and who's just good at LinkedIn. They basically got access to Berlin's startup mafia. The initial four EiRs came from this network, and when Chemovator needed to scale, those four recommended friends from their own circles. Network effects at their finest—quality control through social proof.
Venture Boards: Startup Governance Goes Corporate
In 2019, Chemovator dropped another innovation bomb: Chemovator Venture Boards (CVBs). Every venture team got a 3-5 person board, and here's the radical part—EiRs, not BASF executives, had decision-making authority. This wasn't your typical corporate "advisory board" where executives nod politely and then do whatever they were going to do anyway. These boards had actual power. And they needed it, because here's what many know, but nobody openly talks about in corporate innovation: corporate employees are not an ideal recruitment pool for startups. They're risk-averse by training, and they often bail when things get uncomfortable (which, in startups, is always). When BASF employees dropped out due to risk aversion, CVB members didn't panic. They filled interim leadership roles and recruited replacements from their startup networks. Problem solved, startup style.
The VC Pivot: When Time Became Money
The original model gave teams 24 months to figure things out—basically corporate project timelines. But in 2021, Chemovator made another adjustment: they went full venture capital. Instead of guaranteed time, teams had to pitch for continued funding at milestone checkpoints. No more participation trophies. No more "let's see what happens if we give this six more months." Just cold, hard venture math: show progress or show yourself the door. This shift aligned incentives perfectly. Teams couldn't coast on corporate patience, and investors (both BASF and the EiRs) could cut losses quickly on ideas that weren't working.
Why It Worked: The Secret Sauce
Chemovator succeeded because it solved the fundamental tension in corporate innovation: how to get entrepreneurial results within corporate constraints. Traditional approaches pick a side:
· Pure corporate: slow, risk-averse, bureaucratic
· Pure startup: fast, risky, potentially irrelevant to core business
Chemovator found the middle path:
· Entrepreneurial leadership with corporate resources
· External perspective with internal knowledge
· Startup speed with corporate patience (when deserved)
· Independent decision-making with strategic alignment
The flexible engagement model was crucial. By keeping EiRs as independent contractors rather than employees or fixed-budget service providers, BASF accessed entrepreneurial talent that would never join a corporate innovation team full-time. And by paying only for value delivered, they ensured skin in the game.
The most important ingredient? Trust. Nothing of this would have happened if Chemovator had not been based on an extraordinary amount of trust that went two ways. For once, Chemovator MD Markus Bold, himself a BASF veteran of 17 years, holding a PhD in Organic Chemistry, trusted the organization he built to figure stuff out as it went along. There was no blueprint, no Corporate Innovation playbook or BCG framework to implement. Instead, there was continuous adapting and improving, carried by the belief in the people he hired for his core team (none of them a trained chemist, by the way).
And secondly, there was trust in the EiRs – trust that went beyond work relationships that we know from interim managers or freelancers, as positive as those can be. In seven years, there was not a single moment of “we’re paying the bills, so we decide - and you execute.”
In return, some EiRs trusted the results they helped to bring about (i.e. startup teams spinning out to raise commercial VC) so much that they went in with their own angel money, or personally joined founder teams.
One-on-one vs corp vs corp
A final reason this worked so well was that commercial relationships between Chemovator and EiRs, as mentioned, were one-to-one instead of organization vs organization. Each EiR was individually contracted, which may sound cumbersome but allowed for maximum alignment in availability and scheduling. Because the EiRs, for the main part, continued to be active founders and business leaders in their own right and their own projects. For example, three EiRs built startup companies during their tenure at Chemovator. Two more sat on several company boards; two others yet were involved in M&A processes. While this required some flexibility in scheduling, it allowed the entrepreneurs to stay on board for the long run since they didn’t have to choose between continuing their main gigs, i.e. their startup activities, and paid mentorship at Chemovator. At the same time, Chemovator benefited from the ongoing involvement and credibility of EiRs being active parts of the startup scene.
The End: Why Good Things Don't Last
Despite its growth trajectory – in ’24, it had also started to make early-stage VC investments in external teams -, Chemovator was shut down in July 2025. Not because it failed, but because BASF underwent broader restructuring and decided to focus resources elsewhere, mostly in China. Obviously, this highlights the Achilles heel of corporate innovation: dependence on corporate support makes even successful programs vulnerable to changing strategic priorities and financial pressures. Almost never is CVC ready to commit resources the same way “real” VCs do, i.e. accept and build for fund runtimes of 10 years or more
But here's the thing—the model worked. For seven years, a massive industrial corporation successfully ran startup-style innovation by handing control to external entrepreneurs. They proved it could be done. Any company planning to set up similar activities and improve likelihood of success should learn from it.
The Playbook: How to Steal This Idea
Want to build your own Chemovator? Here's the cheat sheet:
1. Find Your Network
Don't try to build entrepreneur relationships from scratch. Partner with existing accelerators, angel groups, or startup communities. Buy access, don't build it.
2. Give Real Authority
Advisory boards are useless when run as bureaucratic tools of control . Decision-making boards, however, are magic. If your external entrepreneurs can't actually make decisions, you're just paying for expensive therapy.
3. Flexible Everything
On-demand engagement, milestone-based funding, and network-driven scaling. Rigid structures kill entrepreneurial spirit.
4. Embrace the Outsiders
Particularly in early stage, industry expertise is overrated. Fresh perspectives are undervalued. Sometimes the best innovation comes from people who don't know why something "can't" be done.
5. Prepare for Corporate Reality
Even successful innovation programs can be casualties of broader corporate strategy. Plan for sustainability from day one.
6. Trust. Trust. Trust. And if in doubt, kill a venture instead of dragging it along in the hope for a deus ex machina.
The Bigger Picture: Corporate Innovation's Future
Chemovator wasn't just a program like many—it was a proof of concept for a new model of corporate innovation that benefits from the established landscape of hands-on entrepreneurship. As startup ecosystems mature and entrepreneurial talent becomes more accessible, we need more hybrid approaches that combine corporate resources with entrepreneurial leadership. The old model—internal innovation labs and consultant-driven transformation—is dying. The new model looks a lot like Chemovator: entrepreneur-led, network-driven, and ruthlessly focused on results rather than process.
BASF may have shut down Chemovator, but they've given every other corporation a blueprint for innovation that actually works. The question isn't whether other companies will copy this model. The question is: who's going to be smart enough to copy it first?
September, 2025 | Christoph Raethke | www.christophr.de |