How can Startups Benefit from Strategic Alliances?
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Equity Strategic Alliance
Strategic Alliances for Startups
In this case, two or more firms own different percentages of the company that they have formed by combining some of their resources and capabilities to create a competitive advantage. Equity strategic alliances are most preferred for startups, but the point to be taken care of is about the equity--a company should reserve as much equity as possible, as giving more equity to the other is equivalent to throwing away your company. An equity partner can be a good idea in case you are unable to find an investment partner, or you want to focus more on growing your venture than raising funds. Since the choice of equity partner would determine your success, it is better to choose a like-minded partner as it would not only help you to be more innovative, and come up with creative ideas and strategies, but also work for your business in the long-run. A famous example is that of Cott Corporation and J.D. Iroquois Enterprise, Cott being a soft drink supplier and Iroquois a private spring water products supplier. This led to Cott gaining exclusive supply rights for the spring water products, and expansion of Iroquois' products in the west and Far East.