successful u.s. market entry techniques...•definition of us marketing / sales strategy and...

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

fred.greguras@klgates.com

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

fred.greguras@klgates.com

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

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© 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

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© 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 jvessels@nextstepgrowth.com

Fred Greguras fred.greguras@klgates.com

Dean (Kip) Witter III dwitter@thebrennergroup.com

Successful U.S. Market Entry Techniques

Jennifer Vessels jvessels@nextstepgrowth.com

Fred Greguras fred.greguras@klgates.com

Dean (Kip) Witter III dwitter@thebrennergroup.com