STRATEGIC PARTNERSHIPS AND DEALS WORKSHOPClose the deal and up your game to the next level

October 12, 2011

Howard Donaldson

Let’s Make This Interactive

Agenda

1. Introductions2. Why Strategic Partner?3. Challenges: Are You Prepared?4. Importance of Strategic Plan5. Identifying Potential Partners6. Preparing for Meetings7. Contracts and Negotiation8. Four Class Exercises

1st Exercise - Introductions

Name and company Why are you here? Expected Take away?

Ready to take on the world

Convinced you can do it alone

THE REALITYIT NEVER IS THAT EASY

Time, Resources, Knowledge, Competition are Barriers

I Want To Be A Millionaire

I will start my own business Reality or Fantasy

24.7M Companies in US 99.9% are small < 500

employees 75.0% are sole proprietorships

Ave sales $53,272 Net profit $11 Over 50% fail

Conclusion – Being small is not good

Small business Survival Rate (Ontario)

Year Survival Rate1 77%2 63%3 53%

10 23%US Statistics 50% of all businesses in the US fail within 5

years including mergers and acquisitions

Core Problem

9

WeWorkIn Silos

Value of Partnership

One man/woman can only accomplish so much

A coordinated TEAM effort can accomplish significantly more

10

Why Strategic Partner

Scale faster; Difficult when small Odds stacked against you

Accelerate Growth Establish credibility/brand

recognition Funding for your product/service Business practices and training

opportunities

Successful Partnerships and Deals

Bungie Studios – Started 1991 2 guys in a Chicago basement Mac game developer Mega Hit Halo released 2001, 10 years later Development deal and then acquired by Microsoft

Distinctive Software – Started 1982 Successful game developer in Vancouver Developed many successful titles Acquired by EA in 1991 Became largest studio in the world

Pixar – Started 1984 Purchased computer graphics div - Lucas Arts Focus on animated shorts and commercials Toy Story released 1995, 11 years later Distribution deal and then acquired by Disney

Challenges

Time commitment and beauracracy Control and influence issues Potentially venture off course Dependency Demands from partner Unfavorable terms Cost of termination

Honeymoon does not last forever

To Close Successful Deals, you need to understand who you are first To win, you need:

Strong PassionSuperior productCommercialization

What is your Deep Passion?

What is your

economic

engine?

What can you be best

at?

Importance of Strategic PlanKey Elements Benefits

What is your business?

Where are you today? Where are you going? Compelling Vision Opportunities & Risks Product Plan Market and

Competition Business Model Credible Financial

Plan

Get own house in order Interest from partners Compelling pitch Product demo Ability to answer

questions Improved credibility Increased business

focus More effective

business dev Financial Metrics and

Plan

Strategy

Digital Distribution

Game Consoles Wii, PS3, XBOX 360, PSP, DS PC & MAC Iphone Applications Wireless/Handheld

One, to invest in quality content using your strongest brands.

Two, leverage new platforms and technologies to deliver this product

Three, better exploit international opportunities.

Strategy

Potential Strategic Partners

2nd Exercise – Partner Plan

What is your core business? What are you good at? Where are your business gaps? What is your largest business

opportunity? What are benefits of strategic

partner?

Effective Meetings

Advance preparation Meeting prep very important

Business Development and Networking

Strategic Partnership Plan Key connections

Conferences/events Industry associations Government connections

WOW Factor

Will you be remembered?

3rd Exercise – Meeting Plan Business Dev Scope and activities? Networking activities? Potential partners? Pre-meeting work? Meeting agenda?

Effective Contract NegotiationKey Terms Negotiation

Responsibilities Term and extensions Deliverables and

expectations Exclusivity Approvals Rights – terr,

platforms, etc Price and payment

terms Termination clauses

Know what you want Identify important

business terms Negotiate upfront - Top

Mgmt Letter of Intent Open to negotiation Legal Counsel advice

4th Exercise–Terms/Conditions Prepare and present a term

sheet (or LOI – letter of intent)