Working With A Large Company
Jean-Louis Trochu
Texas Instruments
May 2011
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Top Line Growth
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Innovation
At the center of today’s hi-tech companies goals,
be they Small or Large.
“Do or Die”
May 2011 JL Trochu
What could the large company seek?
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Access to technology or product
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May 2011 JL Trochu
Development of the eco-system, Differentiation,
Catching up, etc.
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Access to a new business model
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Access to a new market
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Access to talent pool
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Intangible benefits
What could the start-up seek?
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Generate sales
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Access to manufacturing
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Access to capital
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May 2011 JL Trochu
Direct sales
Opportunity to integrate into a system solution
Leveraging on infrastructure, name recognition
Direct equity investment
Intangible benefits / Other
Selling directly to a large company
CA-based semiconductor start up, VC financed
About 5 year old, one known customer, ~$10M in sales
First opportunity to sell to TI on a sole source basis
but had to invest $$ upfront; significant revenue and profit
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May 2011 JL Trochu
Price
Timely device development and qualification
Assurance of supply (unknown demand)
Clean of IP infringement risk / claims
Financial resilience and default risk (breach)
Multiple engagements
Belgium based software start up, with complex structure
About 4 year old, one known customer, <20 employees
Great algorithm SW complementing TI’s offering
but limited ability to engage with global customers
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TI reimbursed company to port its SW on TI’s silicon
TI invited company at customers visits, trade shows,..
2010 – TI declined investing in company
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May 2011 JL Trochu
Change in TI BU executive mngt and account mngt
Change in company structure
Company delivers on goal / nurture relationship
2011 – TI revisiting potential investment in company
Direct Equity Investment
Israel company is 1 year old, appealing SW technology
No financing available, no revenues, <10 employees
Great 3D algorithm SW to differentiate TI’s offering
How strategic investors generally differ from VCs
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Ownership <20%
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Board observer only
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Veto and other tight preemptive rights
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May 2011 JL Trochu
Not just an equity invest.
Not equipped for exit mngt
Not equipped for daily
intervention, staff
upgrade,..
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Not always perf. aligned
Some Observations….
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Stay focused
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Balance opportunities with constraints
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Prepare; ask lots of questions; adjust to audience
Know your alternatives; move on w/o burning bridges
Enlist experts
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May 2011 JL Trochu
Nurture; everyone needs attention; it is a marathon
Develop your selling / negotiating skills
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IP protection; today’s gain vs tomorrow’s handcuffs
Establish multiple-point relationship
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Know what you really need, what your vision/goals are
Not everyone is a CEO to-be; devil is in details
Title
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May 2011 JL Trochu
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Good Luck and Thank You
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