If you hit a roadblock that originates with the other company, identify its reason. Ask yourself, "Why is this occurring?"
It may be that the other company has encountered an internal problem, and there is something you can do to address it.
The company may be distracted by external forces. If the other party starts to become unresponsive, recognize that it may
be distracted by another problem outside of your deal. Ask individuals at the company to speak candidly rather than assume
the loss of interest is related to anything you have said or done.
Search among your resources for help. Members of your advisory board may have a relationship with a contact from the other
company or may have additional perspectives, which can help to resolve the issue.
Assess how badly you want the deal. If it is a true deal impasse, is the problem significant enough that you should walk away?
Take some time, or a break. Recognize that there is an inevitable personalization in negotiations. Even without an impasse,
your level of responsiveness and initial reactions trigger emotions that can affect the relationship. If you need to regroup
with your team to address an issue, do not be afraid to step back and evaluate the situation. Perhaps your group will come
up with a new idea. Taking the time to identify that solution is helpful.
Negotiations are already delicate processes. Throw in cultural discrepancies, and they become even more of a challenge.
If an issue arises, American companies tend to think, "I need to fix this problem right away." When working with foreign companies,
the typical US inclination can make timing of responses and discussions very tricky to balance. We go back to the example
of Asian companies. Many can be difficult to read. They often do not like to say "no" immediately and would rather think about
issues longer than American companies before coming to a decision.
The globalization of business deals means American approaches to business are becoming more widely accepted, although there
are still significant geographic disparities. The advantage to the American way of doing business is that it is more straightforward—leaving
little question regarding where a party stands on issues.
However, local presence is helpful, especially at the beginning and the end of the negotiation. If you are dealing with a
foreign company, a local consultant may give you a perspective not only on the company's inner workings and past deals, but
also on how deals are secured within the region. This local perspective is not as critical in the middle of the negotiations,
where all the details of the agreement are outlined.
The art of finding the appropriate partnerships and creating solid relationships is a balancing act. Developing trust involves
an appreciation of the other party's priorities, goals, and perspectives while keeping your interests, objectives, and values
intact. Although these may seem like less crucial aspects of building relationships—compared to finances, intellectual property,
and ownership—human considerations will play a key role throughout the partnership.
Building Academic Partnerships
For many companies these days, partnerships with acadmic scientists and academic institutions are crucial. But though the
same principles of relationship building hold true, there are differences in how the process plays out. It's worth giving
these crucial partnerships their own separate look.
Relationships with scientific experts are intrinsically both business and personal. When you deal with a leading scientific
experts, you are working with individuals with high-profile reputations, people who are passionate about the intellectual
property they created and about your ultimate vision regarding the technology. It is crucial to share their vision as well
as their passion.
It should go without saying that when searching for an academic partner, firms should look for a scientist who is an expert
or is conducting research in an area related to their product. But it is important to go beyond mere subject-matter match.
If you want to forge a partnership with these experts, it helps to recognize exactly what they want. Beyond all else, you
must demonstrate to top thought leaders that you are committed strategically as well as financially to the field in which
they are interested. However, before beginning your outreach, carefully consider the aspects of the deal they are likely to
- level of support for research in their lab
- freedom to pursue projects
- equity interest in the company
- consulting fees
- voice in decision-making or advising.
In developing a partnership, it's often very difficult to satisfy both sides' needs. While researchers' and companies' interests
are somewhat aligned at the outset, these needs are very different because the company wants to commercialize products and
the researcher is focused on discovery. Argos realized from the start that to form these partnerships, it needed to be flexible
and willing to give these leaders what they wanted.
Build the relationship at all levels It is critical to build relationships with scientific experts based upon trust and commitment while maintaining consistent,
ongoing communication. This can be difficult because of the demanding schedules of leading academic researchers, so it's important
to set up at least a monthly call between the researcher and the head of your company's research and development department.
More frequent communication, conducted on an informal basis, will help strengthen the relationship. From a more formal perspective,
advisory board meetings should be held at least twice a year.
Companies get more mileage out of strong relationships with scientists. In Argos' case, advisors have provided helpful perspectives
on issues outside the specific parameters of their engagement because of their experience with dendritic cells. Scientists
have relationships with other industry experts, and this may provide additional resources, contribute insight, or even develop
new applications for your technology.
Once you establish a good relationship with a scientist, you are in a better position to build an equally strong relationship
with the university technology-transfer office. Generally, if one of the institution's top scientists wants to collaborate
in a certain area, the transfer office will make that possible. Although the institution—not the scientist—owns the patent,
the scientist plays a key role in determining how the technology will be developed and how the patents are licensed.
That's not to say companies shouldn't pay attention to what the university wants. It will probably try to obtain from the
collaboration some or all of the following:
- funding for additional research
- funding for overhead
- up-front license fees and payment of patent expenses
- due-diligence requirements (specific time-based goals related to the development of the technology)
- milestone payments and royalties.
The bottom line is that the university wants to make sure you are actively developing the technology and not just sitting
Relationships with the academic institution are not as focused on trust and loyalty as those with the scientific advisor.
These relationships are straightforward transactions and do not entail the week-to-week, day-to-day communication involved
when dealing with scientists.
Instead, the relationships are more similar in nature to corporate partnerships and some of the same rules apply. As when
negotiating with a corporate partner, it is very important to build personal relationships with other individuals in the greater
negotiation circle. Doing so will ensure that you have internal champions who can help carry the deal forward.
Jeffrey D. Abbey, is vice president of business development for Argos Therapeutics. He can be reached at email@example.com