Video Transcription
Nate Harrington 00:04
Henry, okay, welcome. Thank you for coming to this session. I hope we make it worth your while. The genesis for this was talking with Henry about what would be useful for startups and potentially other investors to be familiar with when it comes to dealing with strategics on your board. The thought really was to put together a bunch, or at least a couple of strategics, and then a few financial investors to really get the take about what it's like to have strategics on your board, how to work with them, and what things to avoid, what things just to be thoughtful about. So that really was the genesis of this. I have the dubious distinction of being both the moderator and a participant. My name is Nate Harrington. I'm with Philips. I'm in their corporate venture arm. I've been with Philips for 13 years. Most of my time has actually been on the BD and M&A side of things, so I know what it's like to be on the other side. Before that, I was with Boston Scientific, so I'll let my colleagues make their own brief introductions.
Carissa Black 01:15
My name is Carissa Black. I am part of the Medtronic venture capital team. I've been with Medtronic for just about 20 years. I started in R&D and have been in a variety of roles since then; the last eight years have been on the venture capital team.
Auriel August 01:31
I'm Auriel August. I'm with SANTÉ Ventures. I've been on the venture side for just a little over three years now, but initially trained as a physician before making the switch to the dark side, as we talk about. We do early-stage investing and often like to work with strategics. Hi.
Janke Dittmer 01:49
My name is Janke Dittmer. I'm a general partner with Gilde Healthcare. We are a Transatlantic venture and growth capital fund with about 2.6 billion under management. I have a history of both doing independent venture as well as corporate venture in the past. We have quite a lot of corporates also in our LP group. So I'm really happy to be here in beautiful Portugal.
Alexander Schmitz 02:15
And I'm Alex Schmitz, a partner at Endeavour Vision, also a Transatlantic growth stage investor in medical device technologies. I've been with the firm for about 10 years, and prior to that, I spent 10 years working in a business development strategy role at an interventional cardiology company.
Nate Harrington 02:33
Okay, the first, the first, we have only about four questions or so that we want to go through, but the idea was to really sort of tease out some more information from all our perspectives, so we'll see how this works. First, we're going to start off as the CVCs with the idea about how we think about investing in startups, really? What are our motivations? How do we think about our responsibilities, and what are some of the implications in working with strategics? Generally speaking, most strategics, and I'll speak more with regards to Philips, and this is part of our new mandate, we only invest in things that we feel like we're going to acquire. We still take, we still look at it very much from like a financial VC, looking at the fundamentals about return and what we will get back from it. But I would say we tend to think about getting a chance to see a company de-risk, get in, work with the management team, along with our colleagues in VC, and set it up in the best way possible, trying to make it as successful as it can be. I really don't worry about the back end M&A in terms of when, as regards to Philips, Philips will have a chance. But I think what we're fundamentally trying to do is create good companies. Particularly when you have a director seat, you're always thinking, first, fiduciary, what's the right thing for the company? And then secondarily, which we all have to contend with is, as a shareholder, how do we look at this? And then thirdly, I have my Philips hat on, so that's how we look at it. How is it that Medtronic?
Carissa Black 04:29
I would say fairly similar. Our first priority is investing in strategically relevant companies that we could acquire at some point. We definitely take the financials into consideration. We're trying to make good financial bets whether or not Medtronic is the eventual owner. We like to see all of our companies eventually exit. I think a big part of how we look at things is we want to stay close to companies, make sure that we understand all of the nuances, inflection points, so that when there is a time for exit, Medtronic is in a good position to potentially acquire, as opposed to not having all of the latest information and having to react quickly. We think that that's a distinct advantage for us, but also for our portfolio companies. Any comments from the general crew? I don't know, Alex, how you look at it when you start to think about working with strategics, and some of the differences in your motivations, perhaps, versus ours.
Alexander Schmitz 05:30
Yeah. I mean, we've partnered with strategic and corporate venture funds in several of our portfolio companies, and we've had many companies that we funded independently, without corporate involvement. I think there are pros and cons, just as there are pros and cons when you're selecting a financial investor, and I think a lot of it comes down to the stage, the company, the sector that it's in, and ultimately, kind of what the buyer universe or the exit path looks like. When you're raising money, I always try to start with the end state and then work backwards. In thinking about bringing on a corporate venture partner, you should probably go through the same process. In sectors like cardiology and structural heart, where companies tend to transact based on clinical data, there's a pretty well-established and somewhat limited buyer universe. Taking strategic money, I think, can be a really smart move because you're getting exposure and input from your universe of likely buyers, how you go about doing it, and navigating some of the potential pitfalls around rights and information sharing, I think, is really important, and we'll probably get into more of that as the discussion unfolds. Capital, wherever you can get it from, is essential to funding your startup. You have to weigh the pros and cons of financial investors and strategic investors.
Auriel August 06:58
Yeah, it's no secret, particularly in medical devices, that the majority of exits are through M&A, and as Alex mentioned, there is a limited buyer universe. Particularly as early-stage investors, we're usually coming in at the seed or Series A. We're looking at exit timelines of five to seven years. It's really nice to understand what strategics are looking at. Is this a particular area that they're interested in? It's also an opportunity to educate them along the path of why we're interested in this particular area. Too often, I find that there is an almost adversarial aspect to it, in that we're trying to sell you something and they want to buy something. But I think you come to it from the point of view that we both want to bring new innovation. We want something that's important, but corporates want something for growth, and how to work together along the process so they understand how we're getting there and the dissociation systems that are made, I think can be a really positive aspect. I definitely will add to what Alex is saying, that where you are in the stage of the company, and ultimately, what the goals are of a strategic investor, why they would be investing in that is important to understand up front.
Janke Dittmer 08:04
Yeah. So I think while we are always trying to build companies that can stand on their own, obviously the public markets are unpredictable, and so an IPO exit is something we've done for probably 30-40% of our companies, companies like Anari, Axonix, CVX, and many others, but you cannot bank on it. One thing that people forget is that in our industry, actually the customer is not the LPs who give us the money; they're the financiers. The customer is actually the people who buy the companies we build. By and large, as you say, it's actually the strategics. Rather than having an adversarial relationship, why not develop a sort of customer intimacy? Really try to understand and anticipate the unmet needs in three to five years. You need to really go deep and sort of work closely with them. The other thing is that we want to have an impact, right? Our motto is better care at lower cost. We are also an impact fund. The way we achieve impact in an M&A situation is to make sure that the acquisition is successful. If half of the PMIs (post-merger integrations) fail, the willingness to pay the next time around will be about half because they're going to discount that. How do you reduce the post-merger integration risk? By partnering along the way and sort of de-risking that relationship building. Most corporates don't want to buy from a cold start. They usually have partnerships investing preceding that process, and I think this is something that is often overlooked. We really believe in a collaborative relationship with strategics.
Nate Harrington 10:02
The other question that had come up was really thinking about when you want to consider having a strategic potentially on your cap table. I know that this perspective seems to have changed a lot over the past two decades. There was always a wariness about having a strategic on the cap table. I think that has changed, and I've actually had VCs speak on almost behalf of telling their founders, it's like, no, it's okay, as long as you do it right. What are the things that you find most important in having discussions with your companies about bringing a strategic on? I'm thinking in terms of how you think about reputations or perceptions of a given strategic, how you think about rights, and again, how you think almost about the individual, like who's the person who's going to be in the seat, and things that you would advise startups, because you're probably in at an earlier stage than we are. Auriel, would you like to handle that one first?
Auriel August 11:16
Sure. We have a few principles around when thinking about bringing a strategic investor. As Alex also mentioned, you do need capital, and particularly right now, the capital environment has been tight, so you always want to prepare those relationships. One thing that we always think about is, if you're going to have a strategic on your board, it's really nice to have two, not just one. This way, you don't get too deep in with one, where if you're lining up where a lot of your development has been, and you've shared a lot of your development process, suddenly another strategic coming in later to drive a competitive process can feel like they're too far behind or feel like you're already too deep in with one of whoever's on your cap table. It is really nice if you can get two interests, also if there are different types of strategics. There are the Medtronics and the Philips that go kind of more structural. There's also durable goods, like the BDs and the Bards that may bring different aspects to your production line as you're coming through the development of the company. As far as advising our CEOs and thinking about that, in addition to that, ideally, it'd be great to have two. You obviously don't want to give away rights too early. We always think about their equity and ownership in the company, trying to keep it above a certain level. If you have two, you want to keep them at the same ownership level, fully diluted, thinking through just what is best for the company. Then you get to a point where it is ready for an acquisition that there aren't things in the way that another party coming in would be wary of.
Alexander Schmitz 12:45
Yeah, and I think that's just really important. Again, it's going to be specific to each situation, but maybe just a couple of specific things that come up frequently that you want to consider carefully. We had the discussion internally recently on a situation where there was a right of first negotiation, and someone made a comment, oh, but that's pretty benign because it's just a right to negotiate. Yes and no, it's less benign than a right of first refusal, but it still puts you on ice for a period of time where you can't go out and solicit other bids. It still creates a potential negative signal if the party that had the right of first negotiation, to the extent that that's disclosed, doesn't exercise it. In our business, whether it's as a financial sponsor, strategic sponsor, or an acquirer, you're always wondering what the folks on the inside know that we don't know, and diligence and the whole negotiation process is an attempt to close that asymmetry, but it's imperfect, right? If somebody has a right to negotiate and they don't exercise it, there's a signal in there. It's not always clear what the signal is, but it's not benign. There's another sort of profile where some strategics say we don't want any rights, and we're going to give you a lot of money, and in the process, they take a pretty meaningful ownership stake on your cap table. It looks pretty clean, but effectively, that's an embedded discount that other bidders in the process won't have. It's not a right, but it is, again, an asymmetry with respect to other potential bidders or buyers of the company. Again, there's no right or wrong answer to any of these questions, and there's nothing inherently good or bad about these provisions. They're just things that together with your outside counsel and your board, when you're considering taking on outside money, you need to pay attention to those terms. They're not necessarily benign, and if you understand what you're doing and you balance the risks and the benefits, you land in a good place. But nothing is without consequences. Those contracts are all there for a reason. I know it sounds silly, but again, people sometimes gloss over things that they later come back to regret.
Janke Dittmer 15:12
I think there is an interesting history on these terms. When I entered the venture industry in 2005-2006, it was quite common to have very strong rights. I was part of the corporate venture student executive forum back then, and this was like a group therapy session for corporate venture groups. Eventually, we sort of socialized the idea that that was not good, right? That actually you're hurting yourself, you're hurting your returns as a CVC, you're hurting your credibility, and you're hurting the companies. So then I think people went away from that, you know, own the arms length. Some of them even did it for financial reasons involving their pension funds to invest, and then you lose often the strategic value add. I think now we are in a phase where early-stage capital is more difficult to get, and the terms are becoming more onerous again. We have to be careful that we don't, as corporate ventures out there, repeat some of the old mistakes. In the end, it's kind of a very individual per company, per case situation. Just throwing something out there, if you bring in a company that would otherwise maybe not be a potential acquirer, but you kind of groom them, you make them comfortable over the course of several years to become an acquirer. That's a great thing, and we've done it in several of my portfolio companies. If you look at the statistics, one is better than none; two is better than one. But are you losing the collaboration with the first party when you bring in the second? It really depends on how they look at each other. How combative are they? In that sense, there's no easy sort of recipe for success. But I think holding back on the strong rights as long as you can is key.
Auriel August 17:14
You also mentioned about working with certain strategics and reputations and that sort of thing. Ultimately, this world that we live in is built on reputation and social capital. It's about relationships. You do want to think about those things and how the particular parties that you're bringing in, same with venture capital, what investor you're working with, how does that board structure look? Who are the folks there? Ultimately, they do have reputations versus others. Some CVCs think only about strategic acquirers. Some look at it more from a financial side. Some do both, and you have to understand what their motivations are. It's really important when you are constructing your board to think about those pieces. You never want to burn any bridges, right? That's just rule number one, but it is especially important in medical devices, where that world is so small and the land of acquirers is pretty close.
Nate Harrington 18:07
So what do you think about that? Having heard that, I'll say a few things. But first, Carissa?
Carissa Black 18:13
It's interesting to hear everyone's perspectives. I think, you know, at Medtronic, we don't ask for rights, and in our agreements, we might have a board seat or a board observation seat. In the case where we have a board seat, I'm on a board with Auriel, where I'm a director, and we have another strategic who has a director seat. We have fiduciary responsibilities to the company. In that case, we also have someone from our operating unit who is a board observer. My perception is that we're all working in tandem to help the company achieve success. We provide insight into clinical design and regulatory strategy. I feel like in the right circumstances, it can be a win-win for everyone. In that case, neither strategic has rights, but I think both are helping the company and, at the same time, hopefully potential acquirers down the line who are well-informed about the company's operations.
Nate Harrington 19:20
If I reflect back upon our portfolio, we have some where we have rights and some where we don't, but I would say, I think over time, it's changed a great deal. I think the days of rights are generally long gone, but sometimes it comes down to the position that a company is in. You have to remember that as a strategic, even though I may be thinking like this, or at least I try to like a VC, what's most important is I have stakeholders too. One of the other things is that companies are known for is that strategics hate to miss out. The purpose of a right of first negotiation or notification is to put some people at ease. It's like we're putting in a fair amount of money. We're investing our time. We want to see this go well. We don't want to miss out. At the same time, I often try to counsel internally that if we don't get certain rights, it should be okay. Any company is going to want to bring as many people to the process that they can. Odds are we won't be missing out. But it is one of those things that people have their own motivations, and like with most of us, you have your partnerships. We have the people holding the purse strings that we need to at least be mindful of. I think what was brought up with reputations is very important. I look at it the same way with financial VCs; it really matters who's going to be in the seat and who you're working with. That's something I think is true for anyone you let on your cap table or have on your board. You want to be very mindful of how you all work together. The next question that we brought up, money aside, what do strategics actually bring to the table, and what do you expect to get from them? Janke, we'll start off with you first.
Janke Dittmer 21:34
There's a whole host of things. If you accept the thesis that, at least for us as VCs, corporates are our customers, we need to understand what their purchase criteria are, how they're going to look at companies. Getting through a corporate M&A process, if you have done that before, you know how hard it is. Getting several buyers in parallel is even harder. My role often as a VC is to try to sort of do a test run while we do the diligence. You're never going to do quite the same as a corporate would do. Having a corporate investor means you're actually starting to get M&A ready. Your data room is in good shape, your quality system is in good shape. There are things that reduce the risk for an acquirer in terms of post-merger integration. That's one function that's very, very important and not to be underestimated. The other function is to bring the commercial perspective, sort of reimbursement, some of the regulatory things, but I think regulatory we typically have pretty well under control. What are the critical trials that actually drive adoption once the company is commercial? How do you scale internationally? Is the manufacturing setup in a way that is sustainable and allows you to compete ultimately in the market? What does the team need to look like? The good corporate investors that I've seen are operating; they can bring a lot of value add in terms of people, in terms of expertise, even opening up their own internal reimbursement departments to provide some free advice. The deeper those relationships are, the more value you're going to get out of it. You have to be careful, obviously, that you don't get so deeply involved that you reveal your deepest secrets at every level of the way. You need to understand what's your sustainable uniqueness. Generally, I err on the side of, you know, there's more to be won than lost in the process of collaborating and going deep there.
Auriel August 24:05
I'll say maybe from thinking even on the earlier side, before the commercial aspect, which is definitely important as you're getting into later-stage companies, a great way is really having access to their business unit. You're usually thinking that the strategic investor that's on your cap table has a business unit in that particular clinical area that they're investing in. They're seeing the entire landscape. They may have access to great KOLs. They know the great animal labs for early-stage, kind of first of human early, pre-clinical studies. Really utilizing their network, like you mentioned, is much wider than what a lot of startups will have access to. As you're working through the process, if you can really leverage their contacts, it can be very, very valuable.
Alexander Schmitz 24:46
Not much to add. Those are pretty comprehensive. Maybe just one thing is also tapping into the operational, supply chain, and manufacturing competencies within the strategics. They know a lot about how to build things at scale. Ultimately, as a buyer, they're going to be thinking about, not only is this a good product, does it have great data, is it a huge market, but can I make enough of these at scale, at margins in my organization that I've got a business? If I can, or I anticipate big problems in integrating, that's going to either dissuade you from buying a company or impact the purchase price. In addition to the clinical, regulatory, and commercial folks, I wouldn't overlook the operational and supply chain folks. As a startup, you're not producing at that scale, but making sure that your product can be designed for manufacturability in the arms of a large corporate is really important. If you bake that in up front, again, start with the end game in mind and work backwards, that can help. The strategics have tremendous capabilities and resources that if they're on your cap table, you should definitely pick up the phone and tap into it.
Nate Harrington 25:55
I'm trying to think of things that you've left off that we would like to think that we bring to the table. I agree, definitely the strategic and industry perspective. I feel fortunate, and I hope my companies feel fortunate to have me on where I've been on the other side and having to go through M&A and what that means because it is really all about de-risking. Different strategics when it comes to acquiring have different levels of comfort about the risk that they want to take on. Not everything has to be commercial and proven out there. A lot of things, as we know in the PMA space, go early, and it's really all about de-risking up to a point. Having a strategic on will give you those insights, and then having access to our functional subject matter experts, I can't think of the number of times where I've made introductions to someone in regulatory or someone in R&D. It's a tricky thing because even as a strategic, you have to be careful that you don't want to lead them because they are not building this for you. You're just trying to provide insights to make sure that it's de-risked and that they don't do things wrong. It is a tricky thing that you don't want to get too deep with any one strategic perspective, and we don't, for a lot of reasons, legal aside, you don't want to go down too far. The other thing, which I think is always good to be mindful of, is access to materials. We've loaned a lot of imaging equipment to folks when they need that. There are other tangible aspects that you can get from having a partner who happens to be a strategic.
Carissa Black 27:41
One other piece, which I touched upon earlier, is that when we bring forward a new investment, we have an investment committee which consists of senior leaders in the company. These are areas that they may not have visibility to early-stage companies that might not actually transact for five years. Having that level of visibility within our company, and also the focus that investment brings for us, for our business unit partners, is a less tangible benefit, but I do think it helps bring strategics along in the process in a way that if we didn't make the investment, we can definitely follow the companies, but we have a lot more focus when we have the investment.
Nate Harrington 28:30
Okay? The last question that we had is really hitting some of the trickier situations that can come up with strategics. Some of these, I would say, are ubiquitous, like follow-on funding and what people are willing to do. I think every now and then you hear the horror story of, well, they had a really bad quarter, and there is a payment coming up or a chance to get into the next round. How are they going to react on that? How do you also deal with sales processes and conflicts of interest? There's always the ubiquitous possibility that their strategy may change, and they look at things differently. How do you think about some of those thornier or potentially thornier aspects?
Alexander Schmitz 29:21
There's a fourth that I would add to the list: they develop a competing product. Not kidding. I don't mean to be a downer, but I think that is, unfortunately, the biggest, almost existential risk that you have to be aware of because to the extent that your IP doesn't prevent somebody from doing that, or to the extent that your investment agreements don't prevent one of your strategic partners from doing that, it can and has happened. It's something to think about. Your financial sponsors can also do things that turn out to be not so great for the company. It's just things to look out for when taking money from anybody. The change in strategy is one, but to one of your comments made on the pre-call, that can happen with financial sponsors too. It's more related to fund life cycle. Funds, if they have been in a company for a while, may not have enough capital to follow on, and so they're not investing. Or maybe they had a change in strategy. They used to do med tech and biotech, and now they're just doing biotech. My sense, and I'd be curious what the panel thinks, is that it's a little bit easier. It's never easy to explain why one of your existing investors isn't following on. It's generally not a good signal. So if you can avoid it, avoid it. When a strategic doesn't follow on, I think the default is to interpret that as a sign that this is no longer strategic. As much as you might point to a bad quarter, a change in leadership, or a change in the team at the CVC organization, the default interpretation when a strategic doesn't follow on is they don't either like this product or they don't like this category. That's probably the hardest thing to navigate. I don't have any real solutions there, but I think the best thing is probably if strategics can minimize the situations in which they don't follow on because there is, at least in my view, more of a negative signal than when a financial investor does it, although even in that scenario, it's never good when people don't follow on.
Janke Dittmer 31:40
Just to start with, I think as an entrepreneur here in the room, it's probably good to assume that in the five to seven years, you're going to basically partner with this corporate as part of your cap table until an exit or an IPO. The strategy will change, right? That's a given. I've not seen any corporate venture organization that is not within a seven-year period change their strategy. That's a given. People will change, right? It's very important how you build relationships with the champions on the other side because it's not about corporates; it's about people. That is a big investment, and you're probably going to spend more time understanding a corporate and getting value out of them than a financial investor. You need to have that capacity. You need to plan for that. I think the corporate venture units have gotten smarter. Back in 2000, when the dot-com hit, they were just as dumb as the rest of the market, getting out of CVC. In 2008, something interesting happened; it was a much softer lending environment. Recently, people have understood they need to invest through all the cycles. I think that's a compliment I want to make to the CVCs. They know they need to be there for a long time to reap the benefits of what they do. There can be contentious situations. One of the most important things in the legals is to have a good conflict of interest clause so that you as a board have the possibility to send a corporate board member out of the room. Of course, there are ways to stay in the room. We had two corporate investors in one company, and they needed to declare that they were not interested in the M&A that was going on to stay in the room. Unfortunately, they both declared that they thought they were buying it, but they wanted to stay in the room. That's tough luck, but you have these instruments, and I think that's very good for corporate governance.
Auriel August 33:48
I don't have much more to add, particularly regarding what you mentioned about corporate strategy changing. When a strategic doesn't follow on, it does tend to be a pretty negative signal for raising outside capital, so learning how to manage that also plays back into not getting too deep with one particular strategic and following their strategy that may have now changed over the next three to four years. Now maybe you've gotten too far down a certain path that was really important to that particular party, and now needing to pivot. Being really mindful of the decisions you're making along the way, and how much the corporates that are there are influencing that versus what's best for the company, what's best for the overall space, and how to be best in class there, and building a good product that would be interesting to multiple parties is ultimately always going to be what's best.
Nate Harrington 34:34
Reflections on that?
Carissa Black 34:36
Yeah, so when we enter into new investments, we're investing for the long term, contemplating follow-on rounds, and seeing the companies to exit. Obviously, things evolve as companies develop. I would say it's a pretty nuanced decision. Strategy on follow-on strategy does come into play. There are other times where it just might not be a good financial investment. Just like private venture firms are making their decisions, that might be one of the reasons why. Overall, we're investing for the long term. I can think of situations where we had a company being acquired by another strategic, so it was definitely not on our strategy anymore, and we continued to invest and support the company. It's a pretty nuanced decision-making process, at least internally at Medtronic.
Nate Harrington 35:34
Yeah, I would echo the same thing. I think when we sign up for this, as I like to say, these are the gifts that keep on taking, and you really do need to educate your management that you are committed. Even when Philips has been in tough times for the past two years, for virtually all our follow-ons, we committed through, so we never used that as an excuse. It also goes to the point that Carissa brought up; you still got to believe that there's an attractive exit. Even if it's gone off strategy, you still got to believe there's an attractive exit. There are enough acquirers out there. The company has to be fundamentally performing well; otherwise, everyone's going to make the same decision. As long as those two elements are in place, and you have a good syndicate around the table, good strategics who are mature in their thinking, their CVCs will be disciplined and follow on with bridge funding. I know that we've had this year or two of the bridge and keeping things going. The more mature CVCs that you deal with out there recognize that. I'm always struck when I hear that someone wouldn't follow up as long as everything's going well. I see we're coming down to our last minute, so we're not really going to have time for Q&A. Any parting thoughts? We'll start down at the end of the line with Alex on words of wisdom.
Alexander Schmitz 37:15
No words of wisdom, but I think picking the right strategic partner and thinking through all of the topics and issues that we talked about is important. It's a very powerful tool, one that we've employed successfully in our portfolio. For those of you that are in a position to partner with strategics, I strongly encourage you to do it.
Janke Dittmer 37:40
I would say, partner with people, don't partner with companies. Even if there's a risk that they may be gone, there will be new people that you'll make your champion internally. That's really important, and it's about horses for courses. Look at the very specific situations in your market, the sort of force field, and imagine, as you say, sort of do a retro-probation where you say, I've just kind of done a successful exit. What would I have done in 2014-2015? How would I have constructed my corporate engagement strategy along the way? I think that will make us all more successful as players in this ecosystem.
Auriel August 38:26
Yeah, maybe understand your customer. Understand strategics. How are they different? How are they alike? What are their different motivations? Why would they want to invest in your company? Why would they not want to? The better you can landscape and understand your buyer or your customer, the better you can help build the company and partner better with them in the future.
Carissa Black 38:46
I think my biggest takeaway message, which I'm biased about, is that done in the right way, bringing a strategic into the company and cap table can benefit the company, other investors, and the strategic. It could be a win-win all around. Unsurprisingly.
Nate Harrington 39:02
I'm biased, so I would see it the same way. One other comment I would make is, even if you decide not to or something doesn't work out, I think this goes back to like, there are other panels on this, but engage early. It's always important to have a relationship with your potential acquirers. I say that in the plural. Talk early. Figure out with whom in the company you need to speak to, but try to keep an open mind that maybe there is a right time and a right partner for having a strategic on the cap table and in your board. That's it.
Carissa Black 39:42
Thank you.
Nate Harrington 39:43
Thank you. Applause.
