On December 4th Greentown Labs hosted the third installment of our speaker series, focusing on strategic partnerships in cleantech. Previous events concentrated on Corporate Strategic Partners versus Venture Capitalists and IP/Legal Considerations. The December 4th panel discussed how to successfully pitch to a strategic partner. Henrik Holland, Venture Principal at Shell Technology Ventures moderated the panel, including:
Qichao Hu, Founder, SolidEnergy
Nadav Efraty, CEO and Cofounder, Desalitech
Bob Caspe, CEO and Cofounder, International Entrepreneurship Center
Nadia Shalaby, Cofounder, Arctic Sand
Mak Joshi, Director of Energy Management Platform, Schneider Electric
The discussion touched on entrepreneurs’ personal experiences, big picture take aways and advice for understanding a corporate, strategic partner. One hundred plus attendees got to hear some best practices and engage with panelists. Here are some of the highlights from the conversation:
Q: If you pitch to a deep-pocketed strategic partner and they say “no,” where do you go from there?
Consider feedback:“Entrepreneurs are not well served by passion and commitment to ideas that are their own” said Caspe.
If a strategic partner understands the market and does not believe in the product, then consumers probably will not be interested either. This can be a bitter pill for most entrepreneurs to swallow, but getting this advice requires considering if or how to incorporate changes into the product.
Q: How do you best approach a strategic and who within the organization should you approach?
Talk to the decision-makers: Don’t just talk to the engineers or go straight to the top c-level folks. Efraty encouraged entrepreneurs to find a business manager that’s interested in the startup’s concept and also has the power to make decisions. These champions help founders build the case for partnership.
Talk to the corporate venture capital groups: Holland pointed out that venture groups in large companies are designed to help connect entrepreneurs with the smaller operating companies or business units within the larger corporation. They can get you to the appropriate P&L owner and save you a lot of time. Making these connections is a key aspect of their job, so hold them accountable for helping your reach the right person.
Q: When is the best time to approach a strategic partner?
Create a mutually beneficial relationship: You don’t just approach a strategic partner when you’re looking for money. Start building a relationship with them early to understand their needs. Joshi mentioned that the best time to talk to a strategic is when you can see yourself providing them a solution, something the corporation can get excited about buying or developing with you. You want to be able to show a potential partner that you have a plan in place and that you can succeed by tapping into their sales, marketing or technical resources. Learning how to close a deal with a corporation means viewing the corporation as a collaborator in your success.
Q: How do I negotiate my term sheet with a strategic?
Take ownership of the deal: Nadia encouraged entrepreneurs to take ownership and define the deal to the strategic. Crafting the terms is more in your hands than you think. She noted, “This is your deal. Show the strategic the value you’re providing, and then make it clear to them that you need to be free to build your company.”
These types of discussions are helping entrepreneurs understand how to develop valuable strategic partnerships. There will be other opportunities to build on this conversation. Keep an eye out for future events.
Join the conversation next time, at our next event, EnergyBar! on March 5! See the Events page for details.