ABSTRACT
Deciding on the right organizational structure for a new business is a major challenge. A new venture inside a corporation also needs to borrow assets from the core business. Of course, any new venture also needs to continue to learn what is necessary for success in its marketplace. Learning continues even once the business is in the market and being incubated. Some of the assumptions about what to forget and what to borrow have obvious practical implications, but some are subtle. Running a new business as a separate unit will create duplicative overhead, make it harder to leverage resources like the sales force, and increase the risk of confusing customers with multiple offers. •The most successful practice is the formation of a separate NewCo with clear agreements with the core business about who does what, who will pay for what, and how joint work will be managed.
