TEACHING
Feature: Between the Idea and Reality

OUTREACH
Feature: Seeking Greatness

Fourteen Students, Dozens of Questions, One Entrepreneur

Ask the Wharton Experts

Faces of Wharton Entrepreneurship

RESEARCH
Learning from China's Emerging Growth Companies by Teaching Them

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Keynote Speaker to Venture Fair Audience: $20.00 and "Guts" Can Lead to Thriving Business

Phil Friedman arrived in New York from the Soviet Union in 1976 with $500 in his pocket and no English. He needed $240 for his first month’s rent and $240 for a security deposit. He took a crash course in computer programming at NYU and in 1984 founded Computer Generated Solutions, which now has 1,600 employees in 17 countries.

"The truth of the matter is you have to have guts," said Friedman, the keynote speaker at the Wharton Business Plan Competition Venture Fair. "You have to have something inside you that you probably can’t learn in business school. It is being not afraid of failure. It is the fact that you like what you do. You also need to have knowledge. You have to be able to read a balance sheet, understand basic law, market conditions and how sales are done. You have to be able to lead and motivate. Some things you can learn in school but certain things you have to have within you."

After his remarks, a student asked whether the current economic environment is a good one in which to launch a new business. "The right time is the time you decide," Friedman said. "When you feel the fire in your belly, it is the right time for you. Funding is available but you have to work harder for it today. I would do it when I feel it is the right time for me to do it and when I feel I have a good idea."

  


Ask the Experts

Wharton’s entrepreneurial alumni and faculty answer questions affecting your business

How can I speed up the corporate decision making process? All of the deals I have done with large corporations have taken a minimum of 6 months to negotiate. Rather than accepting this as "normal" I've been trying to refine my approach to larger corporations. For example, I've found that deadline brinkmanship works well i.e. if it's not done by "X" we have no choice but to do "Y". I've also found that keeping the decision maker involved helps get things done. Is there anything I can do to that will help get a large company moving more quickly than they normally conduct business?

— Mired in the Midwest

It’s always important to keep in mind that while the deal might be large for you, it is likely only of minor importance to the large corporation. And, if you are dealing with a public company, their priorities could change with quarterly financial results. A few additional concepts to keep in mind:

  1. Going in, ensure that the champions of your deal are motivated and incentivized by their company to get the deal done.
  2. Continue to restate the mutual objectives of both organizations at the start of any major meeting or correspondence. Confirm that the original assumptions are still valid, or, modify them if they have changed.
  3. Always keep alive (though at times it might be subtle) the threat of taking your offering to their competitor.

— Rob Weber, Lecturer, Wharton Entrepreneurial Programs; Fellow, Jerome Fisher Program in Management & Technology (M&T); Partner, Antiphony Partners, LLC

The problem targeting large companies as customers or "partners" is that it is in their nature to move slowly. It has nothing to do with you or your company. There is a minimum amount of time it is going to take to move a deal through the process in a large corporation. Accelerating that deal is possible on the margin but there are inherent limits. Here are some ideas on how to do it. The first thing to do is accept that your chosen customer base moves at a certain pace. Secondly, understand every aspect of that pace; know its parameters. Thirdly, agree on a timeline in advance and be sure you have identified your internal "champion"; someone on the other side you can trust and who is motivated to get the deal done. Next, try to pursue smaller deals initially that fall underneath certain decision-making or approval layers. These deals move much more quickly than big deals. A larger number of smaller deals with blue chip companies can have as much beneficial effect as one or two big deals. Finally, try to avoid brinkmanship or ultimatum tactics. More than likely they will be counterproductive. In most cases your intended customers, especially big companies, just don’t care what pressures you are under.

— Shawn Marcell, Lecturer, Wharton Entrepreneurial Programs; Sr. Vice President Marketing & Business Development, Linguagen Corp.

My partner and I jointly own a technology company and three patents. Now my partner says he wants to move on and start another company by himself. Clearly we need legal help but what are the main issues related to dividing intangible assets such as our patents?

— De-partnering in Pennsylvania

As with any legal issue, you should seek legal counsel with expertise. That said, in the issues raised in your particular circumstances, some of the key issues are (1) who owns the patents and whether there are any third parties who have any rights in those patents, (2) whether there is an agreement among the owners of the business such as a shareholders' agreement that provides for the distribution of assets upon dissolution of the company, and (3) how the partners intend to allocate rights to the patents between them going forward.

Assuming that the patents are owned by the company, the distribution of the patents would depend on what the shareholders' agreement provides upon dissolution of the company. If the agreement does not address that issue, then the partners would have to reach agreement on how the patents would be distributed to them. If both parties wanted to continue to use the patents then they could enter into licensing agreements pursuant to which each party would have a license to use the patents within a certain scope of use. The allocation of rights to the patents should be part of a global termination agreement between the partners that winds up the pre-existing company and allocates rights and obligations of the partners with respect to the assets and liabilities of that company.

— Robert J. Borghese, Esq., Lecturer in Legal Studies and Entrepreneurial Management; Attorney at Law, Borghese Law Firm

(The above information is provided as a service to the Wharton entrepreneurial community and does not constitute legal advice—Editor)

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