Kain - sounds exciting! Its hard to know depending on your specific circumstances - I've done it from both sides of the fence and you can bet that if its a large coy, then this guy has seen all sorts of deals. Here is some things I've learned: 1. Will anybody sell as passionately as you? Is your product going to be a pull or push sell for the first few years, if its a push then you need to be confident they will have the same passion as your direct sales team would. 2. Passion needs to be converted to perfomance. If its a big company, their folk will be selling other products to hit their quarterly numbers, so you need to make sure their sales manager is pushing the troops to evangelise and move your product. You definately need to negotiate the performance terms and given your first year may be about survival, you should go for quarterly targets. 3. Skin-in-the-game is a great motivator. I reckon they've been painting a picture of how much money they will make for you but talk is cheap. Take the quarterly targets you and have them pay up-front in the quarter and any sales draw-down on that. If they have paid you up-front then the Sales Mgr has additional incentive to push the troops otherwise the CFO will be after him. This is also a very good way to qualify the numbers they say they will make. Give them an additional 5-10% margin to get this thru if they 4. If they want any specific customisation, then charge for it, this is common, non-recoverable engineering (NREs) are another point that lets them prove their committment. 5. Failure to hit performance criteria triggers an option to break contract 90 days later. This allows both parties to work it out. 6. 24months for a B2B product is essential 7. Watch out for any clauses that limit you from selling your product IP or the company. 8. Not sure if you were asking margins but it depends on your product. Software or SaaS could be 50% more or less. Accelerators for over achievement are win-win. 9. Make sure you scope their territory very carefully. What happens if you are selling to Citibank locally and they make a grab for the deal out of Citibank US? Think about these things.
On Thu, Nov 27, 2008 at 11:34 PM, Kain Tietzel <[EMAIL PROTECTED]> wrote: > > I'm working on an online business that's currently in stealth. We're > aiming to start our private beta in December and have a closed beta in > January, but that's not why I'm writing this post. > > We've garnered a lot of interest in our product and a large, > prestigious business in the States would like to partner with us and > has asked for a 36 month exclusive agreement. Whilst we're considering > the pro's and con's of working out what we'd want out of the > agreement, our biggest problem is knowing what sort of $$ we should be > asking for. > > Has anyone in the SBA had any experience with exclusivity agreements > (especially with OS/States based companies) and have any advice to > share with us? Whilst we're by no means wanting to be greedy, we want > to negotiate a fee which is fair and realistic. > > kain > > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
