Developing partnerships…

July 15, 2006

About a month ago, Seth and I were put in touch with an older Cornellian who had started a major enterprise out of Ithaca NY. The company dealt with student ID cards, among other things, and had just purchased a smaller company that dealt with student discounts at a variety of well-known stores, hotels, etc. This gentleman suggested we speak to one of his colleagues at this recently acquired company to discuss a potential partnership for our fledgling business, OnCard Marketing. I reached out to this individual and had a couple conversations to explain what Seth and I were trying to build. He seemed very intrigued, considering we were focused more on the technology side than they were. We arranged to get together two weeks ago in-person when he was in NYC on business. Seth and I met with him and one of his associates over dinner and had a really invigorating conversation about the future of their business and how we might be able to add value through a partnership. Seth and I were excited when we parted ways that evening because they seemed to buy into what we were doing. They even suggested that they might be able to provide facilities in their own offices to incubate us until we got off the ground as part of the partnership. Well, all very exciting stuff…

We followed up on that meeting by putting together a PowerPoint presentation that outlined exactly what we envisioned in a partnership and what we would bring to the table. We were scheduled to go to their offices in Boston and present to them last Friday. We signed NDAs on Wednesday to protect both parties from divulging confidential information, and I emailed them the presentation a day ahead so they could print it and review it to make for a more meaningful meeting. Well, I received an email Thursday morning after I had sent them our presentation that they could not go ahead with the meeting unless we voided the NDA we signed the day before. They said it was because they were working on some semi-related things and did not want to put themselves in a legal bind. I didn’t know exactly what this meant, but took it to mean a big FU. We canceled the meeting so we didn’t run the risk of presenting to them without legal protection and had our lawyers draft a letter regarding the confidential materials we already sent them and asked them to destroy the materials. Seth was even more livid than I was about this whole ordeal. Regardless, that was our first attempt at securing a partnership…

Bottom Line: This was a blessing in disguise because this partnership did not make complete sense. It was the proverbial square peg in a round hole. We were trying to make it fit. It’s very easy to get overly excited about potential partnerships. Try to stay focused on your own business and come up with 5 good reasons why this partnership would help you attain your own business goals. We should have done this, because we only could come up with 2 in retrospect and would have avoided a huge headache. Our advice is to be careful with disclosing too much to potential partners without and NDA (non-disclosure agreement), although many people, including us, will tell you that it’s more a gesture of good faith than an enforceable legal document. The last piece of advice is that if something looks suspicious or doesn’t feel right, follow your gut instinct and walk away. This last piece of advice is the most important and will serve you in good stead as you make future business decisions.

JT

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