We know you don’t need convincing about the benefits of industry collaboration, so it’s less a question of if, and rather more about how to find the right partner and negotiate a good deal. In terms of teeing things up and starting the dialogue, here are five important things to do that can help you get there more efficiently:
Map Your Gaps
For a partnership between and early-stage technology company and an industry partner to really pay off, it needs to work for both sides. With financial investors, the goal is fairly straight forward: they put x money in and seek x in return via trade, sale, or IPO. But prospective industry partners, it is a strategic interest; with the goal of using your technology in their products for the markets they serve.
First, do yourselves a favor and do a real gap analysis to figure out what it is that you need that a partner can bring to the table directly. For example, work out the broad areas of your development plan. Strategic partners want to know the development plan e.g., the purchase of equipment, hiring consultants or funding a lease, etc. There is a chance the partner can provide these directly and get to you faster than raising money and procuring. You also get things that are tough to acquire, i.e., first customers, regulatory knowledge, scale-up insights and so forth. Below is a link to an example of a one-page results summary for an H2 storage technology company.
Think (and write) Like a Tech Scout
Tech scouts are bombarded with technology offerings and exciting new inventions. Cut through the noise by doing the following:
Explain product’s value proposition, the needs it fills, and what it replaces in the market
The most effective way to get tech scouts attention is to give them specific examples of how you improve on existing market solutions. Use an attention grabber – a simple statement that impresses and supports why your technology/company deserves a deeper look. Within the constraints of non-confidential information, don’t be afraid to get very technical about what makes your technology so good, and how it’s different.
Clearly state the development stage – proof-of concept, lab results, market-ready, and so forth. Don’t forget to mention what markets are you targeting and how large they are. It’s good to mention the advantages your technology has over the status quo and competitors. Note regulatory requirements to be met, if any, to bring your technology to market. State achieved milestones nice and loud, including any funding or awards received and any important publications – they are great proof of your commitment and help validate your concept and business model.
Make your collaboration goal nice and clear
Finding the right industry partner for an emerging technology company is much more like dating than finding VC money, and don’t forget why: prospective industry partners are interested in long-term strategic benefits from the technology. Make sure they really know what’s so great about what you have, and what you want from an industry partner.
You can talk about the funding you’re looking for, but unless you connect it to development tasks so that a tech scout can understand it – you’re missing a huge opportunity. Keep the collaboration goal simple to reflect what your want to achieve from the partnership – look at the gap analysis you did, e.g., seeking a partner to test integration of your product or material into finished good.
Limit your text
Be merciless with editing text: make your message lean and mean – and get it on one page – okay maybe two. No one has the time to read through lots of text – especially if they’re not yet sure about the potential fit. Stick to bullet points whenever possible (and not six lines long!), and make liberal use of tables, graphs and images.
Compile a Potential Partner List
Most startups can produce an overwhelmingly long list in 20 minutes; the trick is to put those companies in order of likeliness of a fit. To do this, take some time and research their websites. It’s not just hard factors like areas of interests, targeted markets, key innovation resources, but also their vision and culture. See where they have research relationships, or from where they have licensed in technology. It will not only be easier to collaborate with people who share your values, but you might also avoid potential misunderstandings.
Protect Your IP
Trust is a very important part of every successful partnership, but at the same time you need to make sure that your IP is properly protected. Never disclose any sensitive information before signing an NDA. If you’re affiliated with an institution, ask the Technology Transfer Office if they have a ready-to-go form or download our free form of mutual (two-way) NDA to be used with prospective partners.
Reach Out Strategically
Tech scouts come in all stripes, but they are often very hard to get through. Use any common point you have, shared contacts via LinkedIn, industry associations, academic connections and so forth.
When a partnership has been launched regular meetings should be scheduled to allow strong two-way communication between you and your industry partner. Follow-ups and feedback is a best way to avoid failure of the partnership you spent so much time establishing.