This paper explores the network effects that occur when innovative firms are acquired upstream. Network effects here refer tochanges in and of the innovative firm’s relationships with external parties such as customers, suppliers, and venture firms. Thepaper is based on case study research from six innovative firms that were acquired by other companies. It links network effectsto changes on the level of the innovative firm. The network effects of upstream acquisitions form a complex, interrelatedpattern of drivers and consequences. Two loops of effects appear: one positive, which describes how credibility and improvedfinances lead to new relationships and additionally improved finances. The other is negative, and refers to the firm’s decreasedinnovativeness, distanced or dissolved relationships, loss of staff, transformation into a competitor in the eyes of formercustomers, and increased formalisation, along with the acquirer’s lack of interest in the firm’s future. For innovative firms, theimpact of effects are more severe if the innovation is in its early phases of development, while the degree of integration doesnot seem to have a significant impact on the severity of the effects. This paper contributes to business network studies throughits focus on the network effects of acquisitions, through pointing to how various effects interrelate with and strengthenone another in positive and negative loops, and through indicating how external parties reinforce those effects previouslydescribed in the literature on acquisitions of innovative firms.