Industry partners accelerate market entry and assist emerging technology startups in gaining traction. Unlike traditional funding, industry partners bring diverse resources to the table: commercial scale-up experience, knowledge of the industry or market, regulatory expertise, access to critical first customer relationships – the list goes on.
If you are a deep tech startup, you probably don’t need convincing about the benefits of industry collaboration – you want to know how to find the right partner and negotiate a good deal. Here are five important things to do that can help you impress industry tech scouts and forge that make-or-break partnership!
1. Do a "gap analysis"
For a partnership to really pay off, it needs to work for both sides. Do a gap analysis to figure out what you need that an ideal partner could bring to the table.
Think about it: All that a traditional early-stage investor can contribute is money, and so they seek a 10x return on heir investment, via a trade sale or IPO. But prospective industry partners aren’t looking to hand you $500K or $1 million and walk away with a $10 million gain on a sale. They’re doing it out of strategic interest – with the goal of using your technology in their products for the markets they serve – and they can also bring their existing captial or organizational resources to bear. These resource make industry partnerships a unique and powerful tool for your organization.
First, you need to work out the broad areas of your development plan. Industry tech scouts want to know what they can offer beyond simply financing your technology's development – a.k.a. which resource you need that they can provide. Do a gap analysis to understand what you're looking for in a partner: resources like equipment, consultants, a lease, or other in-kind contributions
A gap analysis can also include intangibles, not just physical equipment or analytical services. These include customers, regulatory knowledge, scale-up insights and so forth. For more information on how to do a gap analysis, make a free seedsprint profile and let us guide you through the process.)
2. Want to impress industry tech scouts? Think like a tech scout
Tech scouts are often bombarded with technology offerings and exciting new inventions. If you send them another densely written, five-page technology and business description, with ten pages of back-up slides, may not have the desired effect. (We're heard this complaint from tech scouts many times – that's why seedsprint helps startups build tech scout-friendly profiles.)
To get a dialogue going to the right way, do the following:
Value, value, value
The most effective way to get a tech scout's attention is to give them specific examples of how your technology provides unique value over existing 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 technical about what makes your technology so valuable and unique.
Help them say 'yes'
Get all the key roadblocks out in the open and share any external validation you have already received. Some tech scouts only work with technologies at a certain development stage, so share details like proof-of-concepts, lab results, and other market-readiness. Note any regulatory requirements that need 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. Boast a little – it's part of the fun!
Limit your text
Be merciless with editing text. Make your message lean and mean and get it on one page – well, 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 make liberal use of tables, graphs and images.
3. Find the right tech scouts with a targeted list
Most startups can produce an overwhelmingly long list of potential partners in twenty minutes. The trick is to put those companies in order of likeliness of a fit. If you’re not sure and it’s a guess, go with it. Then take your list and do some research on each of their websites. It’s not just hard factors like areas of interests, targeted markets, key innovation resources, but also their vision and culture - very important, yet often forgotten factors. See where they have research relationships, or from where they have licensed technology. It will not only be easier to collaborate with people who share your values, but you might also avoid potential misunderstandings.
4. 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.
5. Use free online tools
Tech scouts come in all stripes, but they are often very hard to get through to them. Use any common point you have, shared contacts via LinkedIn, industry associations, academic connections and so forth. Seedsprint is a free online tool for emerging technologies allows your organization to make a private profile and search for and message technology scouts directly.
Any questions about how seedsprint can help you forge great industry partnerships? Just drop us a note.