This work therefore aims to find the combinations of governance structures (internal and external) that allow the greatest scope for developing the innovation capacity of small firms. Going beyond Grandori and Furnari’s approach (2008, 2010), which demonstrates that a relationship exists between internal governance structures and a firm’s innovation capacity, this paper also incorporates the external framework insofar as it accepts that the innovation process also involves interactions between governance structures external to the firm. We draw on the literature of the New Institutional Economics to address these issues and test them through a survey of 110 Brazilian R&G coffee industries. Two types of innovation are investigated: i. product; ii. method/process. To determine the combinations of elements we used the Qualitative Comparative Analysis (QCA) software fs/QCA, version 2.0 (RAGIN, 2008). It has been hypothesized that the capacity of innovate is more present in firms that adopt a mix of governance structures (internal and external) than those with singular structures. In addition to analyze the complementarity of internal and external governance structures allows for the firm’s greater innovation capacity. In allowing the identification of the organizational requirements that create greater opportunities for innovation, these results can help chart the actions of public and private policies which enable Brazilian companies to improve their rate of innovation and competitiveness in their markets.