The Two Ways for Startups and Corporations to Partner

When a large corporation partners with a start-up the result should, in theory, be a win-win. Corporations possess resources and legitimacy that startups aspire for, while startups have agility and novel ideas that corporations value. But vast interorganizational asymmetries mean it is often not straightforward for such different firms to collaborate. Disparities in size, structure and power make it difficult for startups to connect with the right department and individuals within a large corporation. It is therefore imperative for corporations to provide startups with viable interfaces. In my research I have discovered two such approaches: cohorts and funnels. In a cohort, a set of startups participate in a programmatic initiative, such as an accelerator, over a pre-specified period, usually a few months. Peer engagement among the startups is often a key part of the process. While gaining entry into a cohort may be competitive, once in, participating startups generally complete the process. By contrast, in a funnel, many fewer startups complete the process than begin it. Startups get screened out as the process unfolds, often not being aware of other startups that are participating. A funnel essentially has a built-in contest for a limited set of collaborative opportunities.