SiPA: Streamlining the Path to Partnership
Early-stage science entrepreneurs looking to bring their scientific breakthroughs to market have an increasingly robust support ecosystem. Not only has Activate expanded to support fellows across the U.S., but many other fellowships and support programs are now available to the intrepid scientists and engineers who take this path. Still, for many of these founders, launching early collaborations with corporate partners toward anything from an investment or a pilot program to a joint development agreement is generally maddeningly slow and plagued by high legal costs and uncertain outcomes.
That is changing for Activate Fellows, thanks to work led by our CFO Matt Price and senior strategic partnerships manager Nikhil Gargeya. With a funding grant from the Department of Energy’s Office of Energy Efficiency and Renewable Energy, Gargeya researched the mechanics and common hurdles associated with early collaborations between startups and corporate partners. Based on that research, they worked with Partners at DLA Piper to design and pilot a new agreement framework to ease the friction and speed the path to partnership for both startups and corporates. We call this framework the Simple Partnership Agreement or SiPA.
Strategic partnerships manager Calvin A. Cupini sat down with Gargeya to learn more about how the SiPA came together and what impact it has ready had for Activate Fellows—and how it could benefit all science entrepreneurs and corporate innovators.
Calvin A. Cupini: Thinking back to before all this work started, what were you hearing from founders about the friction of partnerships?
Nikhil Gargeya, Senior Strategic Partnerships Manager, Climate
Nikhil Gargeya: I saw from my work with startups the great mutual value startups and large corporates can co-generate. Startups bring agility and new solutions, and corporates bring market and customer knowledge and capacity to scale reliably.
The friction entered through the prevailing collaboration contracts, which made it difficult for both parties to build trust quickly, demonstrate mutual value in working together, or bring in revenue. Joint Development Agreements were generally used for first engagements, but that framework is designed for commercial development and leaves startup founders grappling with long contract negotiations, often with misaligned terms, leading to high legal costs with no guarantee of a partnership! Many founders would have to call it quits before either partner learned anything of value, and of course, many possible partnerships never came to fruition because of these dynamics.
We believed there had to be a simpler way to execute these first-time projects in less time.
Cupini: How did what you learned from startups and their corporate partners (or would-be partners) lead to the SiPA experiment?
Gargeya: When I joined Activate, chief financial officer Matt Price had already been thinking about ways to smooth this bump in the road, and together we interviewed founders, investors, and corporates in different innovation hubs to get a sense of whether our observations resonated with the startup community more broadly. Unsurprisingly the community, particularly founders, were emphatic that the expense, time, and unpredictable scope of launching first-time projects with strategic partners created significant barriers in building and scaling relevant solutions for the market.
As we worked with our teams to validate and build early-stage solutions, it became clear that Activate was in a good place to take the lead in building a solution in the form of the Simple Partnership Agreement, or SiPA, and that the ecosystem needed this yesterday!
“The SiPA is a friendly and quick agreement that even Fortune 100 partners can get behind, and its ease eliminates time-consuming and expensive legal iterations for these early partnerships.”
Cupini: What were some of the initial inspirations for your product vision?
Gargeya: We looked at recognized tools in the startup ecosystem that simplified processes and reduced burdens on startups. The SAFE note, for example, quickly standardizes terms for a first round of fundraising without requiring additional work such as setting valuations, which can be slow and contentious. The SAFE inspired us to create a tool that was easily accessible, widely known, and that helped reduce barriers early in the partnership process.
We want all startups and corporates to think of a SiPA as a default framework when launching a first collaboration.
Cupini: What were some unforeseen challenges in the creation of the SiPA? What a-ha did it take to overcome them?
Gargeya: Communicating how and where SiPA fits into the collaboration workflow was tougher than we initially envisioned. Many corporates misunderstood the mission as replacing a complex joint development agreement, for example, but SiPA simply tucks in after signing a non disclosure agreement and before a complex engagement like a joint development agreement. Engaging corporates in piloting the agreement with specific projects showed them its value: it cut down on paperwork, time, and expense without neglecting the contracting and liability bases.
Calvin Cupini, Strategic Partnerships Manager
Cupini: Let’s say there’s a world in the future that no longer needs the SiPA, what does that world look like for startups, strategic partners, and entrepreneurs?
Gargeya: I love thinking about that—it’s the result we strive for! In this world, startup founders and their corporate partners come to the table with a shared understanding for that first collaboration. Founders clearly articulate their objectives and project parameters, and corporate partners have a startup-friendly flexible project contract and procurement process with a handoff to core groups. They’ll launch early collaborations within a few months in order to test the value of longer term partnerships.
Cupini: What’s the feedback from Activate Fellows and corporate partners who have used SiPA agreements?
Gargeya: Well Grayson Zulauf, CEO of Resonant Link and a Cohort 2020 fellow, says he loves using the SiPA for feasibility studies, which he sets up as 2-4 week paid projects to investigate what Resonant’s technology can do for partners. He told me: “The SiPA is a friendly and quick agreement that even Fortune 100 partners can get behind, and its ease eliminates time-consuming and expensive legal iterations for these early partnerships. It truly is our ‘go-to’ umbrella agreement.”
So that’s really gratifying. And on the corporate side, Tong Wang who works in corporate innovation and startup partnerships for the manufacturer Schaeffler, told me that he has used the SiPA to develop a contract process that he feels is friendly to both Schaeffler and potential startup partners. He told me: “SiPA got us started on the right foot.”
As Activate’s strategic partnerships manager, Calvin A. Cupini develops and manages investor relationships, as well as developing products for the effective scaling of Activate’s mission. Prior to joining Activate in 2021, Cupini has worked in a variety of climate-facing roles as a program manager in air quality research and policy, executive director of Flood Defenders, and as an advisor on low-cost sensors. He also serves on the board of directors of the Citizen Science Association.
As Activate’s senior strategic partnerships manager, Nikhil Gargeya fosters connections between fellows and Activate’s industry and government network to support early pilots and commercialization. Prior to joining Activate in 2017, he worked in corporate venturing and innovation at Siemens next47.