Engaging in exploration and exploitation is essential to business survival and performance. While firms manage exploration and exploitation alliances for the long-term, how prepared are they for sudden shocks in the short-term? We address this question in the context of a unique and opportune natural experiment associated with the 2008 financial crisis. Our analysis of 155 new biopharmaceutical ventures over a seven-year period suggests that exploration alliances—with a long-term orientation—make a firm more vulnerable to external shocks. In contrast, exploitation alliances as well as a balance between exploration and exploitation alliances—which underlie short-term performance—enable the firm to sustain external shocks.