“It’s not enough to just collaborate. What matters is collaborating the right way,” shows a study from the Prague University of Economics and Business (VŠE). The study offers companies guidance on how to select startup partners.

The question “How should the management of a large company choose the most suitable model of cooperation with startups?” had long remained unanswered. A new study by researchers Ferhat Demir and Martin Lukeš from VŠE in Prague provides a comprehensive overview of specific cooperation models between startups and corporations. It also adds seven key criteria that corporations should use when selecting startups. The result is a practical tool that can be used by both corporate managers and startups alike.

The authors identified nine types of cooperation between corporations and startups, differing in the level of equity involvement and the developmental stage of the startup. On one end of the spectrum are models where the company has everything “in its own hands” – such as venture builders (when a corporation creates custom-built startups) or acquisitions of ready-made firms. On the other end, companies take on a more supportive or exploratory role – running incubators, accelerators, coworking spaces, monitoring tech trends through innovation outposts, or organizing hackathons.

The common goal of these forms of cooperation is access to new technologies, talent, or business models. While startups seek infrastructure, funding, and validation, corporations use them to explore innovation possibilities without disrupting their own internal structures. The result is often a mutually beneficial relationship – from one-off pilot projects to deep strategic partnerships. However, success depends on whether both parties can align their different cultures and expectations.

How Do Companies Choose the Right Model for Startup Collaboration?

This review study analyzed 76 prior studies in the field and revealed seven criteria that help corporations navigate the endless jungle of options. “It’s not just about collaborating, but about collaborating correctly,” explains Ferhat Demir.

Every goal calls for a different type of collaboration – and misunderstanding one’s own motivation is one of the most common reasons for collaboration failure. Demir and Lukeš therefore defined seven criteria that companies can and should use to evaluate whether a chosen startup collaboration model is suitable:

1. Why are we doing this? What do we want to gain?
   “If the goal is to quickly prototype new products, then a hackathon or internal incubator makes sense. If a company wants to explore new markets, it’s more appropriate to invest through corporate venture capital (CVC) or establish an innovation outpost. And if it wants access to a breakthrough technology, then acquisition may be the goal,” the authors list.

2. How much control do we want over the collaboration?
   “A hackathon involves low control – the company provides the space and lets the startups create freely. In contrast, a venture builder is fully under the company’s control,” explains Lukeš.

3. How soon do we expect results?
   “Aligning timelines is key – if a company expects results in three months but the startup needs a year, unnecessary frustration occurs,” the authors clarify.

4. How close should the collaboration be?
   “Hackathons are time-limited, usually just a few days, with minimal interaction among participants. On the other hand, an acquisition requires long-term integration,” say Demir and Lukeš.

5. How much will it cost us? And what will we actually get?
   “A hackathon costs ‘only’ tens of thousands – but the outcome is mostly ideas rather than a real product. Conversely, a venture builder costs millions, but it may bring a new business pillar and start generating profit.”

6. What risks are we taking?
   “With an acquisition, the company takes over not only the new technology idea, but also the startup’s debts, cultural clashes, and team issues. With looser models, the risk is lower,” adds Lukeš.

7. Is the collaboration aligned with our vision and long-term goals?
   “Collaboration most often fails when a corporation tries to implant startup approaches without reflecting on its own culture and internal processes,” Demir concludes.

The Impact of Startup-Corporate Collaboration on Innovation

Startup-corporate collaboration isn’t just about profit. The study shows it is a crucial mechanism for knowledge transfer, innovation acceleration, and addressing global challenges. “You can imagine this through specific examples,” explain Demir and Lukeš. “In the energy sector, cooperation between startups and large energy firms speeds up the transition to renewable sources. In healthcare, connecting biotech startups with pharmaceutical giants accelerates drug development. And in education, edtech startups are changing learning models in collaboration with traditional institutions.”

According to the researchers from VŠE, it’s essential to understand that:

• Collaboration with a startup isn’t a one-size-fits-all recipe for success – it’s a strategic choice that requires experience.

• Choosing the right startup depends on the company’s goals, resources, culture, and ambitions.

• Those who lose the most are the ones who do nothing – “In a time of exponential change, passivity is the most expensive choice,” confirms Martin Lukeš.

You can read the original study by Ferhat Demir and Martin Lukeš from the Department of Entrepreneurship at VŠE at this link.