Large incumbent firms in capital-intensive industries currently face important challenges, such as the transition to renewable energy and the digital transformation. Although many incumbents in less capital-intensive industries have positive experience in collaborating with ventures that invent the necessary transformative innovations, incumbents in capital-intensive industries rarely collaborate with them because, in these industries, ventures face a “valley of death” in which financial and human capital to scale their inventions is extremely scarce. We, therefore, investigate the conditions under which collaboration with large incumbent firms allows ventures to scale in capital-intensive industries. We collected a unique dataset of more than 1,000 collaboration proposals submitted by ventures that requested access to the test facilities, infrastructure, and engineers of a large European incumbent energy firm. We compared the scale-up outcomes of ventures that were selected for collaboration by the energy firm to those of ventures that were nearly selected for collaboration. Our results reveal that collaborating with an incumbent firm indeed helps ventures to scale, as it increases their survival rate and exit probabilities, and it allows ventures to attract more employees, investors, and partners. We also did not find that collaborating with a large incumbent firm pushes ventures into a technological lock-in. While we control for sorting and signaling, our results show that access to complementary assets is an important mechanism through which large incumbent firms offer ventures a way out of the valley of death.
