We strongly believe in networks and helping one another. And there’s so many reasons why, be it creating success, getting feedback, understanding different perspectives, inspiring each other, avoiding mistakes, staying grounded, or raising money.
APX maintains a comprehensive and ever growing network of partners, including investors, mentors, experts, and corporates. Through this network, our team aims to facilitate specific and meaningful connections for every startup we invest in. Experience has shown us just how sustainable the relationships that evolve from these conversations, negotiations, or agreements can be.
That said, we suggest that startups, investors, and partners follow a few basic rules when interacting with one another. In a nutshell, these centre on transparency. If you communicate clearly and ask the right questions, you’ll benefit from our network in the best possible way. And in doing so, you’ll avoid frustration or potential harm to your business through bad decision-making and building a negative reputation.
Read my tips for connecting and communicating within the APX network in the most efficient way below.
Understanding the roles of all parties involved, as well as their motivation and objectives, is crucial. Roles can sometimes overlap. For instance, some of the mentors on the APX program also invest as business angels. If you’re not sure who you’re talking to and how they can help you, just ask us. Or, even better, ask them.
Expectations and goals
All parties should be specific about the purpose of the conversation. This can range from an exchange of information and knowledge-sharing to business development initiatives and investment proposals. We suggest addressing intentions and expectations as early as possible, along with the process and timeline. For corporate development topics, we recommend agreeing on a maximum number of meetings by which point certain goals need to have been reached.
It may also help to identify potential barriers and conflicts as early as possible and decide how, if at all, they can be fixed. We’ve learned that being specific about the timeline is very important. It’s best to always use absolute time and money descriptors, not relative ones.
When negotiating a cooperation or investment, bear in mind that not being able to wrap up a deal is always an option. If you do close it, great. If you’re not able to agree at this point in time, explore any other potential for cooperation. It might also be useful to think about BATNA (the Best Alternative To Negotiated Agreement).
The most interesting contacts for you may actually be those offering products close to your own market. Strategic investors and business partners especially can often be competitors to your business. They’ll usually talk to several companies before deciding who to work with. That’s why you’ll likely encounter situations where you or your business partners are juggling several balls at once – that being, exploring opportunities with similar partners at the same time. And either of the negotiation partners may work with competitors in the future.
Conversations or negotiations are not exclusive for either party, unless explicitly agreed. Further down the road, when both parties invest significant time and resources into assessing whether a business cooperation makes sense, an exclusivity agreement can be helpful.
Introducing you to strategic investors or potential business partners is part of our approach. And naturally, they may develop ideas or concepts similar to those you’re developing. Just because they’ve listened to your pitch, does not mean they’ll stop their own tech teams from developing. Usually the law won’t interfere – provided that neither registered nor unregistered intellectual property rights have been infringed e.g. specific source code.
Ideas are generally not protected, unless a specific IP right such as a patent or utility model has been registered. The APX program does not establish any level of exclusivity, confidentiality, or restrictions on competition between the parties either. If anything, all parties are free players in the market. That’s why you need to decide if, how, when, and with whom you share certain types of information. As a general rule, only disclose information that you would also share with a competitor or the general public. This is particularly vital when talking to competitors, such as strategic investors or potential business partners operating in the same area as you.
If you still intend to share information that you consider proprietary or sensitive, clearly communicate that said information must be kept confidential. Both sides should sign a corresponding non-disclosure agreement (NDA) prior to the conversation. Be as precise as possible when it comes to specifying the nature of the confidential information. Regardless of the NDA, any information that is already publicly known or open to the public can freely be used by others.
Investors, particularly early-stage investors, typically won’t sign NDAs for several reasons. For one, they look for people, not ideas. And as they’d have to negotiate and sign hundreds of NDAs per year (at the very least), this could render any future sourcing or investing in a similar product risky.
APX provides as many opportunities as possible for founding teams to get advice, share experiences, and make deals. That said, you are responsible for processing them – you’re always in the driver’s seat. Remember: it’s humans that interact. And there are usually more layers than pure rationality.