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Successful U.S. Market Entry Techniques
November 29, 2011
Introductions
Jennifer Vessels, CEO
Next Step
Fred Greguras, Partner
K&L Gates
Dean (Kip) Witter III, Vice President
The Brenner Group
Tell us who you are.
Top 5 Mistakes in Entering US
1. Underestimate time and budget requirements
2. Limited knowledge of infrastructure requirements
3. ‘Translation’ of sales marketing approaches
4. Ineffective selection, agreements, use of partners
5. Lack clear, unique value to the market
How can you AVOID these Mistakes
Recognize the WIIFM Network
What’s In It For Me
Building Value in the US Market
Value is the
perceived
WORTH
of benefits received
by a buyer in
exchange for the
total cost of an
offering.
Unique Value Proposition
For the target buyer, your ‘solution’ brings unique value.
Competition
Your Solution Customer
Issue
Unique
Value
Identify Your Ideal Customer(s)
What makes someone an ideal
customer for your offering?
What You Need to Know
• What’s happening in
THEIR market?
• What are their greatest
challenges today?
• Their “What’s In It
For Me”
Understanding the Competition
• What is your ideal customer
using today?
• What other solutions can
address their needs?
• What are your competitors
market approaches?
Defining your value
Your combined solution uniquely solves customer issues and provides value
Competition
Your Solution Customer
Issue
Unique
Value
What ELSE You Need to Know
• How do customers buy?
• What else do they buy?
• Who do they listen to /
respect / take advice from?
• How do they learn about
new solutions to problems?
• Where are they in the US?
Go to Market Approach
Define the Sales Strategy First
PROS CONS Strategy
Direct Control Lacks
scalability
Channels Relationships/
Coverage Need to gain and
retain mindshare
OEM Long sales cycle Rapid volume after
penetration
The RIGHT Partners
• Clarify your objectives for
partnership
• Define your company
values and work style
• Identify companies in
complementary market
areas
• Define your value add to
partners and the market
Hiring Sales Personnel
• Partner or Direct?
• Hunter or Farmer?
• Level of Incentive
Compensation?
• Resources required
to manage the
salesperson
Role of Marketing and Sales
Identify Market Opportunity Month 0
Plan Appropriate Time for Success
Define and Understand Target Market Month 1
Build/Validate Value Proposition
Conduct Prospective Customer Research Month 2-3
Build Marketing and Sales Recruitment Month 4-6
Initial Sales Process Month 6-12
Revenue Generation Month 12 and
ongoing
Timing is Everything
Next Step Delivers Revenue Results
• Take your company to the Next Step through:
• Definition of US Marketing / Sales Strategy and
Business Plan
• Business development and contacts in Silicon Valley
• Creation of marketing materials and lead generation
for US market
• Hiring and development of US Sales Team
“Thanks to Next Step within one year of launch, Media
Analyzer’s US operation was profitable and continues to
drive our business growth.”
Steffan Egner, CEO/MD Media Analyzer GmBH
Copyright © 2010 by K&L Gates LLP. All rights reserved.
Successful U.S. Market Entry Techniques Legal Framework
November 29, 2011
Fred Greguras
K&L Gates LLP
650.798.6708
PL-59079-v3
22
My Background
Partner in K&L Gates’ Palo Alto office, 25+ years working in Silicon Valley and Globally
Clients include global software, clean tech and life sciences companies
Founder and CFO of a venture-backed company
Have done many U.S. investments for foreign investors and helped many businesses set up operations in the U.S.
23
Convention Treaty Framework How Treaties Work
Intellectual Property
Paris Convention
Berne Convention
Patent Cooperation Treaty
WIPO Copyright Treaty
TRIPS
Immigration
Visa waiver program for up to 90 days with a round trip
ticket/B visa
E-1 (Treaty Trader) /E-2 (Treaty Investor) visas
Tax Treaty
24
Sample Treaties
IP Tax Immigration
China All Yes No
Denmark All Yes E-1,VW
Germany All Yes E-1, E-2, VW
Poland All Yes E-2
Portugal All Yes VW
Taiwan TRIPS only No E-1, E-2
25
Approaches to Entering the U.S. Market
The nature of the product and target customers are key factors in planning your market entry legal framework
Web site
Sales representative, distributor, VAR, OEM, license
Direct U.S. presence (sales and/or support)
Combination of approaches
Tax planning in all cases
26
Selecting the Right U.S. Business Partner
Practical considerations
Track record in sales
Current commercial representations
Channel relationships
Financial position
Technical capability
Exclusive/non-exclusive relationship
Term of agreement
27
Protecting Your Intellectual Property
Think both practically and legally
Convention memberships/timing
Trademarks – first exposure in the U.S.
Copyright - statutory
Patent - statutory
Trade secret - contract
There is no opportunity without some risk
28
Commercial Law Requirements
Sales paper should look and feel like U.S. paper to a potential customer
Web site terms of use
Privacy policies
Sales approach needs to be feasible in the channel
Uniform commercial code
Limitation of liability
Warranties – commercial and consumer
Consumer protection laws
29
Direct Presence: Subsidiary or Branch Office
May need a U.S. presence to demonstrate commitment to the market and to support your channels
Tax planning
Locating your initial office
Formalities of incorporation – complete the paperwork
Capitalizing the subsidiary – debt and equity
Limited liability if formalities observed
Intercompany agreements to define the business relationship – tax planning
30
Finding the Right People
Work visas – treaty?
Hiring local people: employment laws vary from state to state
Lead time for staffing U.S. operations
Combination of personnel from parent and U.S.
Management scope of authority
31
Summary
Tax considerations need to be part of planning for all approaches
Study the market so you understand how products are sold in the U.S.
Protect your IP both legally and practically
A direct presence may be needed in the U.S. to demonstrate a commitment to the market and to support channels
Hire people who understand your product and its market
The window of opportunity may be narrow so operate at near Silicon Valley speed
32
K&L Gates LLP
Over 2000 lawyers in 39 offices throughout the U.S., Asia, Europe, the Middle East and South America
We have many business lawyers who assist companies entering U.S. markets from basic corporate formation to immigration to taxation in a practical and timely manner
Our lawyers are highly experienced in cross-border transactions
Fred Greguras
K&L Gates LLP
650.798.6708
© 2009, The Brenner Group, Inc. – All rights reserved 33
Successful U.S. Market Entry Techniques –
Important Finance & Reporting Considerations
November 29, 2011
The Brenner Group, Inc.
Presents
© 2009, The Brenner Group, Inc. – All rights reserved 34
Core services
◦ Interim Financial Management
Consulting CFOs & Controllers
◦ Business Valuations; e.g., 409A
◦ Financial Advisory Services; e.g.,
M&As, asset sales, wind-downs
Routinely referred by well known VCs & law firms
1,500 clients in all leading tech sectors
Celebrating 25 years in Silicon Valley
© 2009, The Brenner Group, Inc. – All rights reserved
Kip Witter, Vice President and CFO professional ◦ Executive financial positions at Amdahl Corp.,
Eeonyx Corp., The Capstone Group, Hello Direct, Inc. & William D. Witter Inc.
◦ MBA, Stanford University Graduate School of Business
◦ BA, Applied Mathematics, Harvard College (magna cum laude)
35
© 2009, The Brenner Group, Inc. – All rights reserved
Accounting and tax considerations
IP in U.S. vs. elsewhere – funding challenge
Financing alternatives
Due diligence
36
© 2009, The Brenner Group, Inc. – All rights reserved 37
Accounting standards ◦ U.S.?
◦ Parent company’s?
Consolidation
Reports to Shareholders, Board
Exit strategies
Income tax issues
Other taxes
Doing business
© 2009, The Brenner Group, Inc. – All rights reserved
Who owns the main patents, trademarks, know-how?
Where are you seeking financing?
38
© 2009, The Brenner Group, Inc. – All rights reserved
Parent company ◦ Direct investment (stock, loan)
◦ Trade credit
◦ Bank guarantee
Joint venture
Equity on your own
Government grants
Venture debt/venture leasing
39
© 2009, The Brenner Group, Inc. – All rights reserved
360° view of your business
Entrepreneur’s ability to assess own strengths, weaknesses, opportunities
Validate target market
Build foundation of trust with investors
Forces entrepreneur to look critically at all aspects of the business
40
© 2009, The Brenner Group, Inc. – All rights reserved
Reduces uncertainty about investing
Helps investors persuade their own partners to invest
Helps persuade other
syndicate members to invest
Applies to a prospective
buyer or strategic partner
41
© 2009, The Brenner Group, Inc. – All rights reserved
Critical path between
term sheet and funding
Term sheet: 20% - 50%
of the way to funding
Hire a quarterback to
manage the process
42
© 2009, The Brenner Group, Inc. – All rights reserved
The Technology
The Market
The Team
Financial, administrative and legal information
The unexpected
43
© 2009, The Brenner Group, Inc. – All rights reserved 44
Action Plan
I commit to the completing the following actions:
Action Completed By
1.
2.
3.
Questions?
Jennifer Vessels [email protected]
Fred Greguras [email protected]
Dean (Kip) Witter III [email protected]
Successful U.S. Market Entry Techniques
Jennifer Vessels [email protected]
Fred Greguras [email protected]
Dean (Kip) Witter III [email protected]