Deals can be structure in many different ways. The more work that POET can do independently in moving the technology forward the better the deal they can strike. Accepting money earlier in the process means sharing risk. In general I would think if POET did deals early and accepted something like milestone money in stages the pay out at the end becomes less than if POET did the development themselves and produced working prototypes before settling on the best deal(s). Maybe earlier stage deals mean levels of exclusivity that POET would not want to give away. The further along they take projects the better negotiating power they have.
The bottom line using the detector as an example. POET knows how good it is. They saw it very early on. I don’t think they want to settle on anything that limits the future value to POET of that device because ultimately the first deal(s) could define POETs future in many different ways. The perception of future customers to see how good/strong POET is not just in terms of the product but in business. How good they are at negotiating.
I think the first deal in many ways sets the stage for those that follow so they had better get it right. Ensuring that the company is well capitalised and negotiating from a position of strength is very important. And will be part of the measurement that companies doing deals will look at.
Although we see this as more dilution the company probably sees much more in terms of ultimate shareholder value than most of us can appreciate.
