Startups and Small and Medium Enterprises (SMEs), despite their importance to the local economy, generally have limited resources and face significant barriers to innovate and grow, such as lack of access to knowledge, human resources, and efficient forms of financing. This paper reports preliminary results of a research project that aims to analyze the institutional arrangements in the Brazilian Internet of Things (IoT) innovation ecosystem and how these arrangements support the innovation by startups and SMEs. The research method is a longitudinal case study. The preliminary research results show the main groups of actors and resources involved in the IoT innovation ecosystem in Brazil. The results also suggest that the institutional arrangements in this ecosystem usually favors the big players; several controversies exist regarding key elements of the institutional pillars elements related to the IoT development in the country. Besides, the knowledge diffusion about the IoT and its potential is still needed.