BUFFALO, N.Y. -- When partnering with larger companies, startups with a small number of carefully chosen alliances will reap the most benefits, according to new research from the University at Buffalo School of Management.
Forthcoming in Organization Science, the study found that by aligning with established companies, a young firm gains valuable access to additional resources and markets. However, as a startup adds more outside partners, eventually the firm's internal capability will weaken and the cost of maintaining its alliances will exceed any remaining benefits.