Now or Later
clear and insightful analysis aligned our board on
moving forward with this deal.” –
A small technology-based biotech had just completed its Series B financing. The lead venture-capital investor, who now had a board seat, was looking to ultimately realize the “step-up value” from using the invested funds to validate the company's technology. Soon after, an opportunity emerged to out-license that technology prior to further validation. At the CEO's request, KR analyzed whether it would be better to “partner now” or “wait” for further technology validation. KR's analysis clearly showed that the deal terms being offered were consistent with an “enabling technology,” that a significant portion of the anticipated market value would be lost with delay, and that a non-exclusive license would not undermine subsequent upsides. It was better, in this particular case, to proceed with the deal than wait for a step-up in value. Though contrary to their initial leanings, the board agreed with KR's analysis. Three months later, the deal was signed.