How to Court Another Startup
What is the best way to approach another startup for a potential partnership?
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons. Email your questions about best practices for starting up and/or managing a small business to smbs@foxbusiness.com.
No. 1: Add Value
From Antonio Neves of THINQACTION, Inc.
The best way to approach another startup for a potential partnership is by finding ways that you can add value to their company. Presumably, you know how this partnership could benefit you. But, how can it equally benefit them not just today, but also well into the future? The best way to figure this out is by spending time with them learning what their needs are so you can best serve them.
No. 2: Start Small, and Build From There
From Patrick Curtis of WallStreetOasis.com
You need to be able to communicate the value you are bringing to the table succinctly. A long drawn out email will not only look desperate, but it can reduce your credibility. Put forward the idea for a simple partnership first to make the next step easy before trying to land everything at once.
No. 3: Do Something Cool With Their API
From Wade Foster of Zapier
Many startups have open APIs. Find the docs and build something cool with it. That'll open the door for a host of new collaboration opportunities.
No. 4: Find a Mutual Connection First
From Lawrence Watkins of Great Black Speakers
There is no better way to approach a company than to be introduced by someone who is already familiar with that company. If you have a good value proposition for the partnership, most startups will enthusiastically listen to what you have to say, especially if you have that additional third party verification.
No. 5: Enthusiastically!
From Jessica Brondo of The Edge in College Prep
The best thing you can do is be excited about the other company's product. When you show them you "get" what they're doing and only want to help them be even better, it's a no-brainer that they'll want to work with you. I think you should always approach a partnership with a give and take. It has to be mutually beneficial for it to make sense.
No. 6: Befriend the Founder
From Derek Flanzraich of Greatist
Real, genuine, awesome friends. Because real partnerships are built aren't built on one coffee meeting, but a million (and grabbing drinks instead sometimes doesn't hurt, either).
No. 7: Propose a Low-Risk Joint Venture Agreement
From Doug Bend of Bend Law Group, PC
A joint venture agreement allows startups to take a potential partnership for a trial run for a defined period of time with very little risk for either company. The companies can test out key issues, such as how to share revenues, expenses and assets, but can also allow for quick termination of the agreement if the partnership is not as mutually beneficial as either company anticipates.
No. 8: Be Clear and Crisp
From Brent Beshore of AdVentures
Be extremely clear and crisp. Partnerships are extremely difficult with clear inputs from each party. Partnerships are disastrous when there is even a hint of murkiness.
No. 9: Do Your Research
From Aron Schoenfeld of Do It In Person LLC
In order to even start a partnership conversation, you need to understand the other business and revenue model. Too many people just ask to partner, without ever understanding if there is an opportunity to partner. Research who they partner with currently and their revenue model and see if there are synergies with what you do. At the very least, it will lead to a good conversation of ideas.
No. 10: Try the "Hell Yes!" Test
From Eric Koester of Zaarly
Partnerships between startups are rarely successful -- largely because the businesses are in such a state of flux that alignment is difficult. Therefore, use the "Hell Yes" test to see about fit. Look at the partnership from both sides (yours and theirs) and think, "If presented this deal, would we say 'hell yes?'" If so, then the conversation is easy. Otherwise, walk away.
No. 11: Look at What They Lack
From Peter Nguyen of Literati Institute
Think about what they are lacking or what they need -- and see if your company can complement them in that.
No. 12: Link Up on LinkedIn
From Adam DeGraide of Astonish
LinkedIn is a great social networking site that allows you to contact the person with your request. Always be clear, get straight to the point and be direct. Let them know who you are and what you are doing. You never want to beat around the bush with your request. Also, remember whatever their answer may be, respect it!