Jamie McGurk, corporate development partner at Andreessen Horowitz, offers advice to founders regarding when to accept capital from strategic corporate investors.
Disclosure
McGurk: a16z advises startups against granting board seats to strategic investors
“All things that we advise our portfolio companies generally speaking against. Absolutely. And so there's a balance there. So it's not, those are not things that are automatically granted because they're asked for. And sometimes the right answer is, you know, y…”
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McGurk: Premature exclusive deals with telecom giants like Verizon have killed startups
“I've seen companies die over it, literally. Yep. So doing a deal with Verizon and you can never do another, at a, too early of a stage. You know, not being able to then do a deal with, You know, AT&T or Sprint or anyone else.”
Insight
McGurk: Pre-product startups under a year old should avoid corporate development
“And, you know, the meme was out there that, as Sonal mentioned, that you know, don't engage with the corp dev. And we agree with that at certain points in a company's life. If you're less than a year old if you're really kind of pre-product that we generally a…”
Insight
McGurk: Corporate development teams hold a significant negotiation advantage over founders
“Keep in mind also that these are professional negotiators. So, you know, the a startup and they go through their life, they may raise money, you know, a handful of times if they're doing very well, maybe, maybe several times they will probably, and hopefully o…”
Insight
McGurk: Founders should only share competitor-safe information with corporate development teams
“You know, you should treat that as the type of information that you would tell anyone that you would tell an investor that you would, you know, use on a sales call that, you know, frankly, that you would tell a competitor. So you don't want to give out the ver…”
Insight
McGurk: Founders should build corporate relationships concurrently with 3 to 4 targets
“If you're talking to one, I mean, you should have a plan in place and not to put a time sink into it, but you should be thorough about it. No, not, it's not 10, but it's not one. So it's picking that, You know, to the top of the top, top group that you're most…”