Are You Setting Your Sights on Selling or Being Sold?

For a startup, the goal is to either obtain capital or get acquired. Although the end goal might look different in those scenarios, the preparation process is similar. Bonnie Brayton, Venture Associate for Fulcrum Global Capital has experience scouting technology to acquire or to co-develop products for a large multinational company. She is now working with a venture capital company to vet investment prospects and to help determine investment value. In both scenarios, the acquiring companies and venture capital firms are evaluating the technology and the potential for the product under development.

From there, considerations start to differ. At a large company, the goal is collaboration and developing new intellectual property. At a venture capital firm, they look for technology companies that will grow into successful entities that ultimately deliver a return on their investment.

Headshot of Bonnie Brayton, Venture Associate, Fulcrum Global Capital.
Bonnie Brayton, Venture Associate, Fulcrum Global Capital

“As a tech scout, I looked for technologies that complemented my company’s gaps and that had collaborative founders,” Brayton says. “At a venture firm, I’m seeking technologies backed with a solid business plan. Even if a startup has a cutting-edge, effective technology, we need to understand what the leadership plans to do with it. We ask ourselves: is there a team in place that is going to be able to successfully commercialize that technology?

Building a Business Plan

If a startup is looking for a venture capital investment, building a solid business plan is essential.

Headshot of Jerry Duff.
Jerry Duff, Founder and President, AgriThority®

“At AgriThority® we say a brilliant innovation needs equally brilliant strategies,” says Jerry Duff, founder and strategic lead for clients. “But, most importantly, high impact execution produces extraordinary results. Follow-through with focused, disciplined and scientifically sound development plans is paramount.”

Brayton agrees, “Sometimes an academic founder or an R&D-focused founder struggles to consider the commercial realities. As a scientist myself, thinking about the efficacy or novelty of a technology is the fun and exciting part. You may believe you have the next unicorn that will blast off to the moon. But without a solid commercialization plan, that technology can fall out of the sky quickly.” Brayton acknowledges that guidance from an experienced group like AgriThority® can make a difference in the business planning as well as the product development, regulatory and market access strategies.

How to Find Partners

Once a startup has a solid business plan, how can the company find partners? A common saying applies here: it’s not what you know, it’s who you know. Actively introducing the startup to innovation supporters in the industry is the first step.

Man shaking woman's hand over business deal with another businesswoman watching, in a field with sprinklers running.
Startups should approach networking as a key ingredient to securing a successful partner.

“Networking is probably the most important step to take in my experience,” Brayton says. “You have to be fearless about networking and reaching out to partners and investors as a startup founder. Fear of rejection is a real thing, but if you don’t reach out, you’ve given yourself a hard ‘no.’ Better to play the odds of potentially getting a ‘yes.’”

If either acquisition or partnership with a larger company is the goal, Brayton’s advice is to go into the weeds to find the R&D tech scouts of target organizations or leverage networking connections from the tech transfer officers.

What Goes Into a Successful Pitch

It all starts with the quality of the innovation. But how can you prove performance? Generation of accurate, credible data is mandatory throughout the product development stages.

Brayton describes the importance of performance data by saying, “When you’re going after partnership with a big fish like one of the multinational Ag corporations, having on-point data in the right environments and with the right replicates is key. In my previous role, my former company required multiple years of field trial data before they would consider collaborating on one year of joint trialing data. Getting that many successful field trials in hand before approaching partners is a high bar for startup companies.”

She advises companies to put on an external hat and take an objective view of the technology. Lay out everything that a company may take for granted internally, and make sure it’s all clearly defined. Details can make all the difference.

“Startups must demonstrate why they’re special,” Brayton says. “Are they the first to market? Do they have a secret sauce that no one else has? Do they have an exceptional cost of goods? Do they spell those things out very clearly to their pitch audience? One of my pet peeves in a pitch is a lack of differentiation. It’s very popular to list competition, but it’s not always clear how a startup is differentiating itself from those competitors. That key differentiation is important for a company to clearly illustrate.”

The numbers are important to a successful pitch. Have a realistic market defined. Show that the company has revenue potential. Spell out where the revenue comes from and define the business model that feeds the revenue. For an earlier startup, explain what the plan is for revenue.

“Lastly, having partnerships or collaborations in place with large farms or reputable companies can go a long way in convincing an investor that you’re worth the investment.  After all, these other folks that you’re collaborating with have invested their time in you,” Brayton says. “There’s great power in sharing those existing collaborations, or perhaps even a sharing a collaboration plan if you don’t have them established quite yet.”

As a collaborator or development consultant, Duff explains, “AgriThority® uses our disciplined Prescriptive Response™ Development service to drive detailed plans for the business, the regulatory pathway, product efficacy and positioning as well as market access for successful commercialization.  Often the partners should be included in the evaluation and development phases rather than going all the way to launch before seeking the partnership or investors.”

When your Research is ready for Development, turn to AgriThority® for scientific businessmarket, and product expertise to learn key insights on your new innovations. Our international footprint, combined with our deep understanding of market and producer dynamics, helps you to leap hurdles and overcome barriers to prepare your products for success.