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1.Can you tell our readers a bit about yourself and your career journey?
I’ve been practicing law at Dentons for almost 30 years and lead our Venture Technology and Emerging Growth Companies team nationally.
Denton’s is the world largest law firm and we leverage this for clients in important technology markets around the world. We act for entrepreneurs, investors and companies in the tech sector, from set up to IPO to multi-national and large-scale mergers and acquisitions. We are very active with clients globally – especially in the US, China and the EU. For Canadian companies who are growing, we help them expand into foreign markets. In 2019 and so far in 2020, we have been number one in early stage tech company financing transactions.
2. What inspired your interest in focusing on Venture Technology and Emerging Growth Companies in your legal practice?
My real passion is helping with scaling disruptive technology – including research, development, and commercialization. Technology impacts what we do every day across every sector.
It’s a fast-paced area with incredibly smart people. As a result, it’s very easy to be inspired and to make a commitment to this practice. It’s also very much a team effort at Dentons. And on the international front, it’s interesting to watch other businesses grow with new technologies and to grow the teams at the Firm who contribute to those businesses.
3. What are a couple of the most common challenges facing entrepreneurs who are launching a technology business?
In general, attracting and maintaining top talent is a common challenge — as is attracting capital to your business while not giving up too much dilution moving forward. On the product side, understanding market fit for what you are developing can be a challenge. In most cases, you are only allowed one or two misses.
With the pandemic, things are moving even faster. Timelines to get products out in the market are shorter and investors are more risk-adverse. You must be nimble and flexible, and demonstrate market fit to attract capital and talent.
4. What can companies do to mitigate or manage these challenges?
In most instances, investors won’t fund just an idea. You want as much product development as possible; monthly recurring revenue; and some key clients signed up who are committed to you and willing to take meetings or at least talk about it.
In turn, spend more time developing your idea and be clear on where you fit within the market, and you should have an easier time attracting attention from investors.
Also, investors are always interested in previously successful entrepreneurs and management teams.
5. What advice do you have for technology companies as they pivot to adapt to the current economic climate and global pandemic?
Follow your lead customers. Become embedded and understand what their needs are and how they are changing and are planning to change going forward. Always be thinking about changes in your products to stay out in front of your customers and your competitors.
6. Why is now the time for technology companies to acquire their supplier, customer or partner
Valuations were higher and with the pandemic, they are falling. Where there might not have been opportunity, there may now be one. From a simple dollars and cents point of view, it’s more possible to make a strategic acquisition.
Also, you don’t want to be left behind by your competitors. We are seeing consolidation in the tech industry. It’s not going to be enough to have a good product if your competitors have ones that are more fulsome and, as a result, are able to attract more capital.
Investors are worried and looking to back companies that are creating efficiencies to mitigate risk and have a more robust acquisition strategy.
7. What do they need to do to prepare for an acquisition?
Make sure your company health is in order. Of course, it’s important that your IP ownership chain is in order and make sure you are capitalized well because doing acquisitions will require a large time commitment from management and employees. You will need to keep your existing business continuing to grow so overlaying a capital raise can be challenging.
Lastly, make sure your employees are happy. Your business needs to continue to operate at peak levels.
How to prepare for an acquisition is a topic I will be addressing further at SAAS NORTH Now. I look forward to virtually meeting conference attendees and having some very robust discussion.