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

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....