How can a partnership between a startup and a corporate be successful? That question powers Greentown Labs’ internal accelerator, Greentown Launch.
Launch is Greentown’s most comprehensive method of helping startups and corporates engage in ways that will help them both prosper. The Circularity Challenge, run with BASF and supported by Stanley Black & Decker, is a six-month accelerator focused on disrupting the plastics, energy storage, and recycling value chains. Startups Corumat, Nexus Fuels, Circularise, Interface Polymers, and American Battery Metals Corporation were chosen as program participants from almost 100 applicants.
The first two-day program workshop included mentoring hours, pitch coaching, an introduction to BASF, and a panel about working with corporates. The panel included leaders from three Greentown member or alumni companies—Cambridge Crops, NBD Nano, and Tagup—and was moderated by Jared Craft, CEO of Blue Sky Energy, another member company.
Here are eight takeaways from the panel:
1. Start conversations early, but protect your IP first
Corporates tend to operate on a much longer timeline than startups do, which can cause problems for eager entrepreneurs looking to close a deal. That’s why several of the panelists suggest getting conversations started early on, even if it means your product isn’t as complete as you’d like.
“For us, it was pretty early stage, because we knew that these relationships take a really long time to develop,” Cambridge Crops Vice President of Business Development Christina Belsito said. “Enterprise sales cycles are so, so long—having a head start was really helpful.”
There is a caveat, though: be sure your IP is protected before you head into talks with corporates, the panelists advised.
2. Corporates can understand your company better than venture capitalists do
“The reason that we went strategic over standard VC is because, in general, they understood our product roadmap and life cycle a little bit better, in terms of sales as well,” said Deckard Sorensen, CEO of NBD Nano.
3. Make sure the corporate is a good fit
It’s easy to get wooed by big brand names, but the panelists emphasize the importance of making sure the organization is a good fit for your company and goals.
4. Find an internal champion
It’s crucial to find someone within the corporate who will advocate for your relationship, keep the ball rolling, and communicate with all the relevant decision makers.
“We like to have a technical champion and then a business development champion,” Sorensen said. “One of the things that we found is if you’re not talking to the marketing team, you’re not close to a sale.”
5. Stay alert for good signs and red flags
What’s a sign that you’re on a good path with a corporate? Their level of engagement and follow-up, the panelists say.
What’s a red flags to look out for? Belsito spoke about rigid exclusivity demands, and underlined the importance of the corporate having some flexibility during discussions.
6. Don’t compromise on your product roadmap
Sometimes corporates ask you to take your product in a direction that isn’t central to your goals. The panelists advise assessing whether a corporate’s project will take you far off of your roadmap or whether the pros outweigh the cons.
7. Know your product’s value
Deckard shared a story of a promising deal that halted when the terms included a small royalty that eventually decreased to zero. “Don’t ever undervalue yourself,” Craft cautioned.
8. Working with corporates is a massive opportunity
Partnerships between startups and corporates can be hugely beneficial for both parties—startups can benefit from the corporate’s equipment, funding, and customer base, while corporates often rely on startups to stay on the cutting edge of their industries’ innovation.
“Engaging corporates is very powerful, and something that can really push your business along,” Sorensen said.
Greentown Labs is a community of bold, passionate entrepreneurs creating solutions for today’s biggest climate and environmental challenges. Located in Somerville, Mass., the Greentown Labs Global Center for Cleantech Innovation is the largest cleantech incubator in North America, operating a 100,000 sq. ft. campus comprised of prototyping and wet lab space, shared office space, a machine shop, electronics lab, and a curated suite of programs and resources. Greentown Labs is home to more than 100 startups and has supported more than 230 since its inception.