Throughout my BD & Corp Dev career prior to becoming a VC, I worked for 3 early-stage startups and 4 public companies. I experienced the process of being acquired, and going public (IPO).
Over that period I was fortunate to quarterback dozens of strategic partnerships and M&A transactions.
There’s no question BD can supercharge growth and create enduring value for a company.
But the question I often get from early stage founders is:
"When is the right time to hire my first BD/Partnerships leader?"
I think about this question in two ways:
(1) Outcomes you want to achieve — what success looks like.
(2) The most important skills to look for in a BD hire — what great looks like.
Let’s dive into both of these more:
Outcomes — Think deeply about what BD efforts can propel your company’s strategy forward, most notably your product(s). This means factoring in a number of dynamics such as demand, competition, monetization, and GTM.
Demand — What product feedback do you hear often that you can’t offer today, and would new partnerships deliver a better product experience? Think big here, as in, can partnerships move the needle to help make your product 10x better, and/or solve bigger customer problems?
Competition — What types of partner ecosystems can be built to solve product gaps, deliver more value to your customers, and help you fend off fierce competition?
Monetization — What types of partnerships can be monetized and what value do your partners get? What impact would it have on your unit economics — margins, LTV/CAC, retention, and so on?
GTM Execution — This one is really crucial — if your sales teams aren’t equipped (or compensated properly) there’s little chance of a partnership being successful. A “better together” partnership not only needs to have differentiation but also a sales team that understands and buys into the value it delivers to your customers.
Key skills in a partnerships leader
So now that you’ve thought more about the outcomes and market dynamics that BD can drive, what are the key skills founders should look for to make your first first BD hire?
Strategic thinker. And one who understands technology specific to your domain, can execute a process (including negotiation), and is great at building relationships.
Critical and creative thinker. Has a vision, can problem solve, and a mindset to learn, unlearn, relearn. Can build a framework and execute it.
Sweats the details. Earlier in my career, my EVP of Corp Dev told me he expects me to read every word in contract. That really stayed with me and helped me focus on what matters most and be very thorough.
Applies the 80/20 rule. Not all work is equal, and of the infinite tasks a BD leader could focus on, they've got to know how to look for leverage.
Knows when to walk away from bad deals. The opportunity cost of time spent on bad deals is too high to risk it. The reputation risk of being someone who does bad deals is even worse.
Is prepared to go the distance. Some deals take years to close.
Invests in relationships. Both internal and external. A good BD leader should do this naturally, all the time.
Builds trust. This can't be faked, and is probably the most important element in a productive partnership.