July 16, 2025
In this Highline Beta podcast episode, Simon Ratcliffe demonstrates that corporate spinouts succeed when companies treat them like real investments rather than internal projects, showing how DNV transformed from running 40+ incubator experiments to launching two revenue-generating spinouts by changing ownership structures and accountability.
Simon Ratcliffe argues that spinouts solve a fundamental corporate scaling problem: companies can fund zero-to-one innovation but struggle to resource ventures beyond initial proof points. At DNV, Ratcliffe folded their internal incubator after recognizing that corporate innovation budgets couldn't support growth-stage ventures, instead creating a new approach where DNV invests in their own startups through their corporate venture arm. Both of DNV's spinouts have grown revenue faster post-spinout because they can attract startup talent, bring in external investors with sharper governance, and operate with clear runway and real consequences.
Simon Ratcliffe evaluates every potential spinout using three specific criteria: whether there is real traction and early revenue, if the business is digitally scalable, and most critically, whether the business unit is willing to let go of control. Ratcliffe notes that the control issue is often the biggest blocker, as business units may resist letting someone else take a project even when they're not excited to keep it themselves, especially if it might succeed without them.
According to Simon Ratcliffe, spinouts create fundamentally different dynamics that drive faster growth. Post-spinout teams can attract top startup talent who wouldn't join a corporate but will bet on equity, external investors bring sharper governance and urgency, and teams operate with clear runway and real consequences. As Ratcliffe explains, "The boardroom changes. The urgency goes up. You can't coast anymore," creating accountability that internal projects often lack.
Simon Ratcliffe treats spinouts exactly like external CVC deals, following the same rigorous investment process including writing memos, running diligence, and asking hard questions. DNV has said no to strong ideas when business units weren't aligned and killed good ventures when evidence didn't hold up. Each spinout has had different structures, cap tables, CEOs, and governance models, but all follow the same disciplined approach of treating spinouts like real businesses rather than internal projects.
Simon Ratcliffe's primary concern is deal flow generation. With DNV's incubator shut down, the spinout pipeline is drying up because business units aren't generating enough new ideas at scale and there's no central engine to create early-stage bets. Ratcliffe acknowledges this tension between incubation and spinouts, noting that "if we don't solve the deal flow problem, we'll grind to a halt, and we won't make the company more innovative."
We’ve worked with dozens of corporates trying to innovate beyond their core. Most of them talk about spinouts.
Very few actually do them.
That’s why our conversation with Simon Ratcliffe was such a gift. At DNV, he’s not just talking about the spinout model, he’s actually using it. Twice successfully. A third on the way.
In a corporate world where bureaucracy and risk-aversion too often kill great ideas, Simon is living proof that thoughtful execution, stakeholder alignment, and a bit of startup mindset can turn incubation into real growth.
Here’s what stood out.
When Simon ran DNV’s internal incubator, his team launched 40+ experiments. Most were killed off early. But one had real traction. The problem? Their corporate innovation budget couldn’t fund its growth. The team couldn’t be hired full-time. The resources weren’t there.
That’s the trap many corporations fall into: they want big outcomes but they don’t fund ventures past zero-to-one.
So Simon made a bold move; he folded the incubator and stood up a new approach inside DNV’s corporate venture arm. His thesis? “Let’s invest in our own startups that we create from scratch rather than just those on the outside.”
It was a logical evolution: incubation gave them proof points. Spinouts gave them a path to scale.
Post-spinout, both of DNV’s ventures have grown revenue faster than they ever did inside.
Why?
That shift in accountability matters. Spinouts work not because they’re “outside the mothership,” but because they create the right pressure to deliver.
As Simon put it, “The boardroom changes. The urgency goes up. You can’t coast anymore.”
Simon’s team evaluates every potential spinout with three filters:
That last one is often the blocker. Even when a BU isn’t excited to keep the project, they’re not always excited to let someone else take it. Especially if it might succeed without them.
But DNV has something many companies don’t: a long-term mindset and a culture of pragmatism. They’ve been around 160 years. They know how to play the long game.
Simon didn’t sell spinouts as a revolution. He pitched them as an experiment. He showed early proof. He built trust.
That’s the real unlock.
Every one of DNV’s spinouts has had a different structure. Different cap tables. Different CEOs. Different governance models.
And that’s okay.
Simon’s rule? Follow the same investment process they use for their CVC deals. Write memos. Run diligence. Ask the hard questions. Treat spinouts like real businesses, not internal projects.
They’ve even said no to strong ideas when business units weren’t aligned. And they’ve killed good ventures when the evidence didn’t hold up.
That kind of discipline is what separates wishful thinking from repeatable success.
Simon’s biggest concern going forward?
Deal flow.
With the incubator shut down, the spinout pipeline is drying up. The business units aren’t generating enough new ideas at scale. And there’s no central engine to create those early bets.
This is a tension we see everywhere. Incubation alone doesn’t scale. Spinouts alone don’t start. You need both.
We loved Simon’s honesty here: “The next problem we’ll have to solve is generating more deals. Because if we don’t, we’ll grind to a halt, and we won’t make the company more innovative.”
That mindset is rare. It’s what makes his work at DNV a model worth studying—and emulating.
—
At Highline Beta, we say this a lot: spinouts aren’t always the answer. But they are an answer.
And when they’re executed with intention, they unlock new talent, new capital, and new kinds of growth that corporates can’t achieve from within.
Simon’s story isn’t just about launching two ventures. It’s about shifting a system. It’s about proving what’s possible, without trying to boil the ocean.
Start with one. Earn the trust. Build the evidence.
Then do it again.
—Ben & Marcus
We always enjoy conversations about innovation and startup building so please get in touch.
.png)
