Questions

I'm about to close a deal with a multimillion company for a software solution which will cut cost and make their operation safer. The company entity I'm dealing with wants us and know that my company is the right choice for this particular service. Also worth mentioning is that my company will own the software and sell it as a complete "product/service" to my client once the software is completed. But they said they can't sign a deal with such a small company. So what I think I need to do is to "team up" with a bigger company and let them have a contract with my client for "distributing" my software solution. ( big company is basically doing nothing.) I know this software will help a whole business branch and have ambitions to sell the same product worldwide and keep developing it. But I'm afraid that I will not be able to build and sell this software product/service on my own terms (I.e not move fast and crush expectations) if I'm playing my cards the wrong at this moment. Any thoughts, experiences or ideas? This can be a big leap for my tiny company and I so badly want to get a foot in the door! Thanks for reading!

Hi there!

First off –congrats on the opportunity. That you’ve found a great fit for your software is wonderful news.

Based on my experience negotiating contracts with companies of all sizes, particularly for procurement organizations, I have some suggestions -

Has the potential customer been able to share with you why they aren’t able to sign a contract with a small company? Beyond there being a ‘policy’, what concerns do they have, and why do they have them? Asking questions to uncover the specific concerns will help you determine if there’s a feature or term in the contract that you can adjust to address the issue. (Some variables that can pop up as concerns are insurance coverage, financial stability so that you'll be around to support them long-term, contingency plans/systems, or adequate bandwidth to meet their needs for customer service/tech support)
I’d recommend exploring this path a bit more with the potential customer before bringing a 3rd party into the mix.

If the client’s concerns can’t be addressed successfully in a negotiation of the contract terms, bringing in another party to act as an agent or distributor is an option.
Some thoughts on what to look for in that relationship:
- establishing a contract between yourself and the agent (independently of the client),
- financial arrangements related to fees/% due to the agent (they may not be doing any development, but facilitating the deal is a service that they’ll likely require payment for),
- limitations on the relationship with the agent (so that it’s for this specific client/product/time period. This way, as your company grows, you’re not limited by that structure).

Hope that helps get you moving with discussions – would be happy to provide assistance along the way.
- Devon


Answered 5 years ago

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