Startup/Corporate Partnerships and the role of Mentors

Corporate partnership is a mutually beneficial relationship between a startup and an established corporate organisation.

You probably read “mutually beneficial” and thought; “no way, big corporates will definitely exploit startups”, while this might be the case in some instances, it should not be the norm. This is why it is important for startups to understand how to navigate the corporate partnership landscape.

Startups desire partnerships with corporate organisations for obvious reasons: they are either seeking funding opportunities, looking to leverage the corporate partner’s credibility, navigate the regulatory environment, deepen their industry insight or most importantly to increase their distribution network.

It is important to note that startups are not the only party that win from this relationship. Corporates also have a lot to gain (without having to exploit the startups). Most corporates are constantly trying to create new innovative products with better technology and hence need cheaper ways of developing new products. They are also always looking to penetrate new markets while up-selling to existing customers. In all, corporates are either seeking ways to make or save more money and partnerships with startups can be a very appealing option.

Now we know that both parties stand to gain tremendously from this relationship, but before entering one, here are some very simple but important tips to remember. Corporate partnerships;

1. Involves two or more entities.
2. Have to be mutually beneficial.
3. Have to be legally binding and
4. Have to explicitly state the roles and responsibility of each party.

Mentors can play a very key role in forming beneficial corporate partnerships. The best mentors provide guidance and when convinced, can open up their network to founders.

Mentors with industry experience can help founders understand the corporate terrain and sometimes would have relationships within the organisations. Mentors can help founders better craft their value proposition in a way that corporates will appreciate. They can also provide founders with key industry knowledge that can make the startup’s pitch more tailored and appealing to the corporate.

But perhaps most important of all is that a credible mentor can make introductions which are usually more effective in starting the partnership conversation than a cold email or proposal. This is because investors and corporate partners trust startups who come highly recommended by those in their circle and a successful mentor has a large network of people who will be beneficial to a founder.

Now, even if you do not need corporate partnerships (and who doesn’t), there is still compelling reason for having great mentors. In an age where the pain-pleasure principle is glorified, it is not shocking that many entrepreneurs do not put in as much effort to seek out a mentor as they would for a co-founder.

Arguments proliferate the ecosystem about why entrepreneurs should trust their guts and follow their own instincts instead of relying on a mentor but it is important to note that most successful companies today have founders who had mentors. Facebook’s Mark Zuckerberg was mentored by Steve Jobs, Steve Jobs was mentored by Mike Markkula and Eric Schmidt mentored Larry Page and Sergey Brin of Google.

Inside VP

We just concluded demo day for our corporate fin-tech accelerator, Labs by ARM. Companies that pitched were Fint, Asusu, Ogaranya, Trove, Payday Investor and Tsaron. Look out for pictures and details in the next Series V.

Portfolio Chatter

1. Tizeti launches IP voice call service, you can read more about it here.
2. PiggyVest just launched a new feature that allows users to directly invest in multiple asset classes, see here.

What are we reading?

The Prosperity Paradox by Clayton M. Christensen, Efosa Ojomo and Karen Dillon. See here

Happy Workers’ Day.

See you next month,

V.