At ACG New Jersey’s event on November 2 entitled “Large Corporate Connects with Early Stage Innovators,” panelists from different stages of entrepreneurship and areas of investment came together to share some wisdom they’ve learned from their extensive experience.
The first panel entitled “Early Stage/Large Company Deals: The Path to Success” included Gil Beyda, founder of Genacast Ventures, Dr. Inderpal Singh Mumick, founder and CEO of Kirusa, Mukesh Patel, founder and CEO of Juicetank, and Stephen Socolof, managing partner of NJTC Tech Council Ventures. The panel was moderated by Joel Cartun of Business Advisory Services.
The panel was presented with the challenge of explaining how early-stage companies could best connect and partner with larger corporations. Many audience members were eager to learn about different strategies for networking and establishing relationships that could lead to mutually beneficial partnerships, and the group had a range of suggestions.
Beyda’s company invests in small, seed-stage tech companies, so he has plenty of experience with young ventures trying to find a way in. For him, finding a joint customer is the most important thing.
“If you want to partner with large companies, find a joint customer that you both share and use that as a way to network yourself into the company you want to partner with,” said Beyda.
For a partnership to succeed, it’s crucial that it benefits both parties, and so it’s the responsibility of smaller companies to prove why they’d be a good fit to team up with companies like Apple or Google. Through establishing a specific market and identifying the joint customers you share, Beyda said, you’re much more likely to get a foot in the door.
Another approach is through an advisory board, of which Kirusa’s Mumick repeatedly stressed the importance. He suggested pinpointing leaders in the business and tech communities who’re affiliated with large companies and bringing them on as advisors, since it usually doesn’t take too much cash and it can improve your network dramatically. Plus, it usually benefits both sides.
“They’re looking to have influence [through an advisory role], and they have the network that’s available to you,” said Mumick.
Beyda reinforced the notion of the advisory board, noting the importance of actively taking advantage of the resources and wealth of knowledge an advisory board can provide.
“A lot of entrepreneurs seek out advisors just to get their photo and bio on a slide, as if that’s the end goal,” said Beyda. “But if you really use them, they have the knowledge on how to grow a company; they’ve been there and done that before.”
He added that it’s not difficult to use your advisory board as a way to reach out to the people you want to connect with. Oftentimes, if you give them a specific name, they’ll open their network to you and use their contacts to help you engage with people.
For Tech Council Ventures’ Socolof, connection always starts with motivation. He said that large companies always want to know your shared vision and how you can impact their business in a way that’s meaningful to them.
“Your impact has to be big enough to matter,” said Socolof. “You have to demonstrate the impact you’re having in the ecosystem to help create that motivation.”
More often than not, that means proving scalability. One million, five million or even ten million probably doesn’t matter to large companies, but they want to see that as a path to something bigger that they can scale into something that matters to them. Once you do that, Socolof says, there are plenty of ways to connect.
“Large companies embrace open innovation, and they see the entrepreneurial community as a source of ideas and growth opportunities,” said Socolof.
The panel didn’t shy away from the reality that at times, large companies can be difficult to work with. To overcome this, they suggested clear communication, but be cautious and strategic in approaching the relationship.
“Working with large companies can be demanding,” said Beyda. “They can suck time from a small company without always rewarding them. The success can be huge, but you have to be careful as you develop the relationship.”
Large companies are unpredictable, and can make moves that affect small partners without consulting them – management changes, going in a different direction, etc. Innovators hoping to connect have to lookout for themselves and understand precisely what role the larger companies they are pursuing can play.
Beyda says the way to figure out that role is by asking questions. Are they going to be a distributor? Will this be a joint venture? Are they going to be an investor or an acquirer? All these roles offer expertise to entrepreneurs and innovators that they need, but keeping on top of the dynamics of the partnership helps ensure a beneficial relationship on both ends.
