Questions

How to work with other companies to form partnerships?

What are the best ways of connecting with other companies to form partnerships and work together? How do you find companies and organization to target? How do you effectively pitch to them?

3answers

Interesting question - But one that (for me) requires additional information for me to give input:

-What kind of "partnership" are you interested in? (i.e. Strategic Partnership where you work together for mutual benefit)

-What is the intended / desired outcome for you? Why are you seeking companies to partner with?

If you can provide this info I'd be happy to give you my thoughts.


Answered 5 years ago

This is a very interesting question and a tough problem for many entrepreneurs.

It turns out I wrote a detailed blog post on the topic just a few days ago. See the link here for full details: http://stavreas.com/designing-strategic-partnerships/

In short, I believe there is a 4 step process an entrepreneur can go through to propose, design and negotiate a strategic partnership:

1) Identify an opportunity which is unattainable to both parties, but attainable if they combine forces. If both parties are excited about the opportunity, they'll sit and talk. The un/attainable opportunity is the "pitch" that will get the parties to the table.
2) Identify the "interests" each party has in pursuing the opportunity. This is crucial. You have to look past "asks" or "wants" and find "interests". Underneath every ask is a reason. Get to the reason, it will give you huge flexibility to come up with a creative solution for working together.
3) List all the assets each party can contribute to a partnership. The can include knowledge / relationships / cash / distribution / IP / brand, etc. This will let you understand what you can both offer to a partnership, and also help to determine how the value (profit/revenue) should be shared between the parties. You can think about the assets you need to chase the opportunity to also select targets to propose the deal to. No point pitching to a group that doesn't have the right resources.
4) Develop a few combinations of those assets into a "combined activity" (ie a merger, JV, partnership, contract arrangement) that is perfectly suited to chasing the opportunity. This step will help you draft a term-sheet to capture the nature of the partnership.

If you follow these 4 steps, you'll be miles ahead in designing a partnership that will work for both companies and will help you get to a term sheet. When it's time to bring the lawyers in to draft up legal docs, their job will be pretty easy.

The key to success is staying "interest based" as opposed to "positional" in your negotiation. A great book to read on interest based bargaining is Getting To Yes, a foundational theory that came out of the Harvard Negotiation Project. Highly recommended.

In my blog post I introduce a canvas which can be used by a team to work through these steps. Have a look and let me know if this helps. Happy to help you brainstorm if you want to share the specifics of your situation.


Answered 5 years ago

Dangerous to pitch a partner ... instead seek to align yourself with companies that share your Core Values. Without that you really have nothing in the long term and when I'm doing partnerships I'm really concerned about alignment in the long term.

So, on that basis, I'd find companies that use the same kinds of language as you in their outward facing communication. Be discerning, it'll pay off!

I have a great podcast on this here: http://wisenapkin.com/2014/02/10/whos-in-your-room-rick-sapio-ceo-of-mutual-capital-alliance-inc/

Make it a great day!


Answered 5 years ago

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