Finneran on negotiation: Be aware of the balance of power
Tom Finneran’s keynote speech on negotiation at the WPI Venture Forum on Feb. 14 hit home with the assembled audience. The topic — "All’s Fair in Love and War" – also had relevance to the presenting company, Worcester-based Total ReCord Inc., which is developing technologies to promote regeneration and regrowth of damaged nerve tissue.
Two striking videos of recovery from paralyzing spinal injury – one of a rat, the other of a motorcycle-accident victim — showed in graphic detail the kind of science worth negotiating for. Neither could walk before treatment. Afterward, both could, with the rat regaining almost complete mobility and the ex-cyclist using a walker. Total ReCord expects to start FDA-approved clinical trials of its Regeneration Matrix product in spinal-cord-injured patients later this year. The company states it expects RMx to have additional applications for nerve damage resulting from stroke and chronic multiple sclerosis.Before Total ReCord’s presentation, Finneran advised his entrepreneurial/ research audience, "Be aware of the balance of power." When research shows the most promise, he indicated, that’s the time to be careful in choosing partners, and to refrain from putting all one’s intellectual-property eggs in one basket.
"How you conduct yourself on Day One might have vast implications for Year 7, Year 10 and Year 12 as you grow that company," Finneran said. If the other side has more knowledge than you do, don’t hesitate to ask them for it. A true negotiation isn’t a battle, he said, it’s an exercise in which both parties work toward common goals. And the intelligent use of a "reverse testimonial," in which the proponent tells the skeptic who thinks it can’t be done, how the proponent solved a similar situation and created a successful business relationship, "catches the attention of the other side," he said. "They start leaning in."
Jan-Eric Ahlfors, CEO and founder of Total ReCord and a WPI alum with four degrees from the school, appears mindful of the balance of power. He said he’ll need to raise $12 million in financing to get four products into Phase 3 clinical trials — but he also said insurers in various countries indicate their willingness to pay $120,000 to $280,000 per patient for a successful nerve regeneration treatment, rehabilitation included.
After the video presentations, the WPI Venture Forum panel – which offers constructive critique of the case presentations at the forum – offered its input. Panel members Brian Dingman, a patent attorney; Pamela Hochman Norton, former senior vice president
of Worcester-based Massachusetts Biomedical Initiatives, and now principal of Watertown-based IMS Management and Consulting; and state Sen. Edward Augustus Jr. engaged Ahlfors in a free-form dialogue about revenue projections, product pricing, and milestones. They also argued the relative merits of waiting to make the science public until a patent is issued, versus revealing more about it beforehand to attract enough investment to finance the research.
While patent protection is expensive, it’s necessary to protect intellectual property, the panelists agreed. Norton said she’d be "more than happy" to introduce Ahlfors and his company to corporate partners which could help forward the research. "I saw that rat. I saw him get up and walk," she said. "Owning 49 percent of something really great is better than owning 100 percent of nothing."
Christina P. O’Neill can be reached at coneill@wbjournal.com
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