In order to stay relevant in an era of rapid change and disruption, companies can do a number of things. Further penetrate existing markets, enter new industry and geographic markets, explore new customer segments and make changes to pricing and packaging are a few of the more traditional options, which will only ever serve to stretch the existing S-curve.

Successfully exploring new disruptive innovations is an alternative approach that is designed to catch the next S-curve, but for most established companies, this is fraught with complications because their businesses are designed to execute upon a repeatable business model, not to look for a new one.

So in order to catch the next S-curve, most large and established companies seek to acquire fast moving and disruptive startups. The challenges and questions posed however are plentiful.

• Who to acquire?
• When to acquire?
• How much to pay?
• Integration or Independence? 

Far too often, large companies spend millions acquiring smaller startups and end up ruing their decision because they essentially acquired the startup once it had delivered most of its organic growth or paid too much for it relative to growth prospects.

However, one of the most devastating plays is made when the acquired startup is integrated into the new mothership, inheriting the parent company's processes and values. Very quickly, everything that made the acquiree great is destroyed as a result of this. The startup can no longer move quickly. The startup can no longer innovate. The startup's employees no longer enjoy going to work. 

I have heard many horror stories in this space. Most recently, I heard of a financial services institution that paid $5m for a startup, only to spend $4m on integrating that startup into the parent's IT infrastructure. Several months after acquisition, the founders and chief dreampushers at said startup left because they could no longer tolerate being constrained by the corporate bureaucracy. Value of this startup today? Zero.

Sound familiar?