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Interview Patty

Partnerships

Get Your Business To The Next Level

Partnerships can definitely be a game-changer for a startup’s growth. A classic example is Microsoft, when Bill Gates had the foresight to collaborate with IBM. No doubt, this proved critical in propelling Microsoft into the stratosphere.

“A partnership can create great leverage for a growing company,” said John McCullough, who is the vice president of corporate development at OpenView. “Some of the benefits include extending your reach through channels to new markets, industries, or buyer types, creating visibility by aligning with a better, well-known brand and bringing along substantial sales and marketing resources.”

But then again, there are certainly risks. A partnership can ultimately be a distraction or a waste of resources.

So what are some factors for entrepreneurs to keep in mind? Well, let’s take a look:

Go Big: If your company is small, it may seem kind of fanciful to try to strike a deal with a mega company. But again, isn’t this what Gates did?

“When it comes to partnerships,” said Jen O’Neal, who is the CEO of Tripping.com, “focus on your top prospect. This will accelerate your momentum. But you’ll likely have an easier time getting other deals.”

Set Clear Deliverables: This process of the negotiation can bog down. It can even take months.
But this is fine. To build a win-win partnership, you need to thoroughly consider the interests of both sides – and then put together a timetable on what needs to be done.

Yet even if you have solid deliverables, things may still go off the rails. “Having a divorce provision is equally as important – if it isn’t working and the measurable outcomes are just not there – it will be obvious,” said Mark Hasebroock, who is the founder of Dundee Venture Capital.

Exclusivity: Don’t take this lightly. An exclusive partnership may mean your growth potential is severely limited. This becomes even worse if the partner does not perform or if you have handed over the rights to your intellectual property.

“Exclusivity can be one of the most contentious matters of a partnership,” said Matthew Crisp, who is the co-founder and CEO of Benson Hill Biosystems. “It’s often not required for mutual success but is a demand that larger companies frequently make of smaller companies. If there is a good business case for exclusivity then terms such as termination, minimums, and diligence obligations must be carefully considered, particularly in the context of the scope of exclusivity. For which geography, amount of time, and target market or customer segment is exclusivity being granted?”

In the end, you should be willing to walk if the exclusivity could be a problem. Let’s face it, a bad partnership may not only stunt your growth but could even make it more difficult to get funding or even to sell the company.

“Boards and shareholders must carefully consider partnerships with exclusivity features,” said Matthew. “And of course, do not skimp on legal counsel.”

Source: forbes

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

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