Thread by @MohapatraHemant

Spent most of my career as an operator but last few yrs @Google, saw how strategic investors think - not much written about this, so startups default to platitudes e.g. " corpdev / strategics just waste time". If you're a startup looking to raise w/ strategic investors, read on:

Caveat Emptor. This is written generically for a situation involving (1) startup (2) Corp (3) Corp VC. Also is implicit that startup is (1) NOT cash-strapped i.e. there is no do-or-die here, and (2) is looking to work with the parent corp regardless of investment from the VC arm.

1/ Most critical is to get a feel for whether this is a VC-led or a Product-led investment. Usually you want the latter for better value-add. Things to consider:
- are product teams excited to partner?
- do they have plans on what they’d like to do together?

- are they offering generic (“we’ll put your logo here” etc) or specific (“we want to co-brand an IOT soln / vertical w/ you as ‘powered by xxx’"?
- who are the product/engg folks involved? They senior enough w/ roadmap authority? Long-timers vs new folks who want to dip toe?

2/ Do some more homework on who you might alienate, if at all, by lining up close to e.g. a GOOG or MSFT. Are their other large partners / customers that do not want you siding up to a large competitor?

3/ Get more clarity on what the commercial angle tied to the investment TS are / would be . Examples are:
- e.g. move 75% of your cloud to XXX by yr2, 100% by yr3”?
- Most-favored-nation clauses or exclusivity?
- product roadmap governance thereof via quarterly exec meetings, etc

4/ Push them on contractual terms that allows interesting things for you.
On Marketing:
- co-branding (e.g. healthcare portal by XXX “powered by <your startup>”)
- logo exchanges, blogs (2-3 /yr) hosted by XXX, booth rights (1-2/yr), PR, exec quotes on major announcements

On Sales:
- featured access to their marketplace real-estate vs you being one of 1000s listed out there
- quota retirement of their sales by selling <your startup> products

5/ If it's a cloud strategic and moving you to their cloud is part of their plan, ask:
- What are their capabilities vs others, and limitations?
- How can they help you enter new markets?
- Are they compliant with all regulations everywhere as your current cloud is?

6/ To close: strategics think v. differently to VCs. Their horizons are shorter coz their deal sponsors may not spend 10yrs at the company! Understanding their end-game, signals, & motivations will help you spend time only w/ the ones that matter & ones that mean it. Good Luck!