Acquisitions of Startups by Incumbents: The 3 Cs of Co-Specialization from Startup Inception to Post-Merger Integration

Nir N. Brueller, Laurence Capron

Research output: Contribution to journalArticlepeer-review

Abstract

Facing constant pressures to grow, established firms increasingly harness external innovation by collaborating with and eventually acquiring startups. To succeed in their exit through acquisition, startup firms and incumbents have to master three steps (the “3 Cs”) that enhance the co-specialization with the acquirer: establishing the Complementarity of offerings, generating Customer endorsement, and attracting an acquirer executive Champion. Drawing on a multiple-case, inductive study of seven Israeli startup acquisitions completed by two acquirers from the information and communications technology (ICT) industry, this article illustrates the different approaches pursued by the startup firms and their acquirers to succeed in managing pre- and post-acquisition processes.

Original languageEnglish
Pages (from-to)70-93
Number of pages24
JournalCalifornia Management Review
Volume63
Issue number3
DOIs
StatePublished - May 2021
Externally publishedYes

Bibliographical note

Publisher Copyright:
© The Regents of the University of California 2021.

Keywords

  • acquisitions
  • entrepreneurship
  • exit strategy
  • startup exits
  • startups

ASJC Scopus subject areas

  • Strategy and Management

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