Business Development
Can mean different things
Strategic Partnerships
Strategic partnerships are you partnering with a big player in the industry for mutually beneficial business agreement. As an exercise, make a list of the top 25 market revenue leaders. A Strategic Partner is on that list.
They think they are big and you are small. The newer business must think on the level of the big player, a different context of significance. So keep in mind their answer to the question "What is this little company doing for me?"
I must answer “What can I do for them?”
How to provide value to Strategic Partners
Provide revenue leverage, i.e. trigger meaningful revenue generation for them.
Handling Exclusivity Requests
A Strategic Partner may request you only partner with them exclusively.
Measure the business impact of agreeing with their agreement. If maintaining open accessibility favors the market, engage in shaping of the exclusivity request.
- Ensure they will announce the partnership publically
- Ensure they engage in co-marketing to generate awareness
- Detail how many HR (program managers) they will be giving for partnership
- Tie the agreement to business results -- get specific
- Limit the time frame of agreement
- Limit exclusivity to specific list of competitors
- Limit to specific geography
- Limit to specific applicaiton use case
- Consider reversing the table, and ensure exclusivity in return
White Dabel Deal
In a white label deal, the partner uses your product, but labels it as their own brand. Or potentially uses your component within their larger, named product. Also termed “Licensing.” They should pay R&D.
Letter of Intent
A Letter of Intent (LOI) is a descriptive contract of agreement between two parties, e.g. one's self and strategic partner.
A letter of intent is used to set a foundation that is later used by the lawyers to paper up details. It just states the decisions and intents of the business people, to be sent with lawyers as statements of representation.
LOIs are non-binding. Maximize the "credit" one is worth by including the motivations for its existence, expected value for the customer, and having it signed by an executive. Triggered outcomes, if this then that
Bring LOIs Letters of Intent to investors
Anecdote 1 startup has 15 LOIs worth 150M a year
These notes are inspired by Founders Academy. I've added some of my own understandings, and the gatherings of other participants.
Founder's Academy was a 3 day workshop for founders at any stage in the journey. It was hosted by Capital Factory and Gordon Daugherty July 2024.
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