Headwaters Strategy, LLC

Entrepreneurial Strategy and Technology Licensing

 

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“The successful startup and financing of our business simply would not have been possible without the quantitative model Betsy helped us develop. We use it to project revenue, plan inventory, and raise financing.” Carolyn Cooke, President and Co-Founder, ISIS “ Betsy Walkerman played a pivotal role in the success of our company. She brought a wealth of experience that was invaluable in negotiating contracts, closing financing and ultimately selling our company to IBM.” David Levitt, Founder, OpenOrders, Inc.

Services

Clients of Headwaters Strategy typically are startup companies developing and marketing new products or technology. Some have been in business for a few years, engaged in product development or custom development, and are at a strategic crossroads as an enterprise.

As company founder, and sole consultant, I work side by side with entrepreneurs to prioritize the issues they need to address, analyze the options and implement practical approaches. Principal services are summarized below.

Strategy:

I am a seasoned strategist, integrating product, market, legal, financial, and organizational considerations. Headwaters Strategy helps:

• Educate entrepreneurs on the benefits and pitfalls of licensing technology.
• Evaluate principal market strategy choices, such as whether to focus on certain vertical markets, how to set levels of pricing and types of pricing, and what services to offer.
• Guide entrepreneurs through analysis of comparable companies to gain intelligence and benchmarks.
• Guide clients through market analysis, which may include visits/interviews with potential customers, R&D partners, industry specialists, and competitors.
• Determine which strategies could lead to successful relationships with investors.

Quantitative Modeling:

I train entrepreneurs to ground their business in quantitative analysis. With my assistance, clients build Excel models of their businesses and analyze different strategies. For example:

• A software business analyzed pricing strategies.
• Another software business analyzed the tradeoffs between investing more in product development versus the level and expense of customer support required for the product.
• An environmental company gained understanding of economies of scale operating a complex web of equipment, people and animals in the field.
• A medical technology company analyzed different royalty structures for a corporate R&D partnership.
• Another software company tuned up its expectations for its sales people based on a quantitative understanding of the dynamics of the sales pipeline.
• An outdoor products company developed cash flow management expertise to enable inventory financing.

In addition to strategic intelligence, the quantitative models produce the financial projections need for business plans, budgeting and managing banking relationships.

Structure Financial Transactions:

I bring an intricate understanding of financial transactions to entrepreneurs to enable them to:

• Value their companies for equity transactions.
• Structure and negotiate equity and debt transactions.
• Establish banking relationships.
• Set up stock option plans.

I enable clients to work and expand their networks in order to locate capital that matches the company's needs and to develop relationships with investors who have the potential to contribute positively to growth.

Business Plans:

Headwaters Strategy views business plans, not as something you write, but as an analytical process that helps you make sure that you've asked the right questions, asked the right people, and looked creatively at your options. To be sure, a plan that is cogently written also helps attract investors and key employees, but the underlying concepts and plans must be absolutely solid. Headwaters Strategy helps with:

• Business plan structure and outlines
• Writing and editing
• Presentation of financials
• Development of presentation slides
• Coaching founders on presentation skills

Building the Company; Coaching:

Business owners find that they consult with me on a wide range of issues related to building their companies. Many entrepreneurs have never been a CEO, and some have not worked directly with a CEO who might serve as a role model. I have particularly deep experience coaching technical founders as they learn about finance, corporate organization and business strategy. With my assistance, they:

• Structure their team and determine key qualifications.
• Prioritize the areas of the company to develop (based largely on knowledge gained in quantitative modeling).
• Manage board and investor relations.
• Develop networking and presentation skills.
• Become adept at negotiations.

Technology Licensing:

Over the past 23 years, I have handled more than three dozen technology licensing deals, including many from conception through implementation, and including some that required dissolution. Licensing involves a complex web of legal and financial issues, all on top of technical development and/or marketing processes that are uncertain. I teach entrepreneurs how to

• Analyze the potential for licensing in their situation.
• Determine who might be possible licensing partners, how to network to meet them, and how to sell the concept.
• Develop a proposal that takes into consideration the interests and fears of both parties.
• Negotiate the contract.
• Manage the relationship.

All this being said, many changes, particularly acquisitions, layoffs, promotions, and strategic shifts involving the partner can derail the best licensing agreements. Therefore, I also coach people on methods of decreasing their risks.

Working Together:

Headwaters Strategy recognizes that entrepreneurs operate with limited resources. I therefore structure the work to leverage as much time as possible of the entrepreneur and other staff members.