A substantial part of my role in the TD Ventures team is reviewing and vetting startup partnership opportunities for the bank, either for our innovation lab prototypes or wider corporate initiatives. Having engaged with nearly 200 startups and run five Collision Days — Shark Tank-style pitch events with our partners at Communitech — I’ve had the opportunity to meet numerous companies with innovative solutions, platforms, and technology. In turn, this has led me to make key connections between the bank and startups that have the potential to transform experiences for TD customers or employees.
For a startup, achieving a partnership with a bank is hard. Really hard. Sometimes the idea isn’t the right idea for the bank, sometimes they have the right idea but at the wrong time. Often it’s both the right idea and the right time, but executive sponsors need time to get comfortable with the idea of partnering with a newer, and smaller, company than they’re accustomed to working with. Building a relationship is an important part of the startup’s pitch. No-one gets a deal on the first demo.
This is why my ability to broker relationships with the right people helps play a key role for these small businesses. Those 200 startups I mentioned? Introductions have been made to more than 70 corporate teams, and 30 of them have turned into business engagements, which include trials, experiments, RFP inclusions, and commercial proposals. High profile commercial integration for the mass market is still some time away.
Make no mistake: our internal teams are eager to find innovative ways to deliver value to customers and the bank. However, there are organizational challenges in co-ordinating resources to make a partnership work, particularly when we’re trying to deliver in line with existing (and well-established) product roadmaps.
We also take a very careful approach when introducing new partners to the bank, being cognisant of the bank’s risk appetite and its commitment to customer data safety and security. Partners that use cloud-based systems, or that touch any personally identifiable information (PII), are considered higher on the risk scale and face additional scrutiny. An 18-month engagement cycle is not uncommon to review and test a startup partnership.
While we’re gearing up the machine to work with a startup, we still want the startup to grow and prosper. Our legal team found a novel way for us to give something back to help build a relationship by sharing some our experience, capabilities, and resources, at no cost.
Patents are a critical way to protect innovation and IP (intellectual property), two hallmarks of promising startups. However, the cost to secure a full patent can be significant — it can easily reach $30,000 or more over the course of a single filing. For many startups, this kind of cost can be prohibitive when they’re already stretching every dollar to build and grow their business.
In 2017, the TD legal team created its Patents for Startups program, the first non-equity fund to be offered by a North American bank that covers the patent application costs for early stage ventures. TD receives no rights to use the technology as part of this program. It’s a way to support startups and build strategic relationships with companies that TD may want to partner with in the future, while helping them to be in a stronger legal and technological position.
I’ve used this program successfully as a tool to help deepen relationships with a number of key startups where the bank sees strong potential for a future relationship. We don’t offer this though to everyone; sometimes we offer the program proactively, and sometimes startups ask us if they can join the program.
Basically, we look at two criteria for eligibility:
1. This is a startup company with a novel solution that would benefit from patent protection.
2. The startup is a prospective future partner of TD, and there is a line of business that is interested in engaging.
For TD, the Patents program enables us to enter into real and valuable relationships with high-potential startups, and can be done much quicker than other forms of partnership. It has been a terrific way to give back to the tech community, while also building high-potential connections that may lead to a future integration.
Most importantly though, for the startups, this program has real value and the feedback we’ve received has been overwhelmingly positive. It has enabled companies to either secure a critical first patent, or to upgrade a provisional patent to a full patent without sacrificing capital.
The biggest challenge, honestly, has been convincing the companies involved that the bank takes no stake in their IP. TD does not receive any financial, technological, or IP benefit, and we don’t even see what the startup is filing. Once we’re over this hurdle, and the startup sees the (lightweight) agreement attached to the program, we’re in good shape.
The TD legal team is, in my experience, one of the most (unexpectedly) progressive parts of the bank. Perhaps I shouldn’t be surprised — they understand better than anyone the importance of securing IP. Legal has shown true agility and ability to support and adapt the process to meet the needs of the startup community, which has been tremendously beneficial to building relationships with some of Canada’s most promising new companies.
It was exciting to announce the first three startups that are part of this program. We want this program to be even bigger. As we continue to explore partnership opportunities, we’ll also be looking more actively for Patents for Startups candidates. Let me know if you’re one of them.