The Corporate Carveout: A Tool for Innovation

Is innovation more successful inside corporations, or stand-alone?

The private equity industry began with the simple premise that managers work harder when they have ownership and accountability for their businesses. In the 1980s, firms like Blackstone, KKR and The Carlyle Group built fortunes by acquiring carveouts.

Today, a new twist on an old idea is the technology spin-out. Great Dane is launching FleetPulse is an independent company, fueled by $11 million of venture capital led by Four More Capital. FleetPulse is focused on telematics to digitize trailers.

Will we see more spin-outs from other large transportation companies? I predict we will, because it gives incumbents more capital, and it provides more resources for innovation.

Benjamin Gordon, Cambridge Capital