Jon Stewart, CEO of MapAnything, explains which contractual redlines founders should dismiss during enterprise sales negotiations.
Insight
Stewart: Founders must embrace 'CEO magic' for their first enterprise deal
“For your first enterprise account, expect to be doing CEO magic, and do a lot of it, and don't shy away from it.”
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Stewart: Offer enterprise customers escrow agreements instead of sharing your startup's financials
“Never agree to show them your financials if you're at this stage. Instead, offer them an escrow agreement. Absolutely, 100%.”
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Stewart: Enterprise deals are won on procurement process, not just product
“The lesson learned there is understand early on, you know, the answer to the question, which is, how do you guys buy software? Because when you attack those, it's never about the, ah, necessarily winning the technical end of it. It's gonna be about everything …”
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Stewart: SMB software solutions are rarely technically ready for enterprise clients
“What you're gonna find is, if you have an SMB, a mid-market solution, and you bring it to that enterprise segment, your solution's probably not ready either.”
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Stewart: Sponsor pricing is meaningless until corporate procurement takes its discount
“And the price, whatever you negotiate with your business sponsor, doesn't mean a darn thing until you get through the corporate procurement Department, and they get their pound of flesh, which they will.”
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Stewart: SaaS startups must strictly avoid IP assignment rights in enterprise contracts
“Absolutely no IP assignment rights, and these are ones that are important, guys, right? And because large enterprise companies will be really sneaky about that and try to stick that in there, i.e., you build a feature for them, they own it, or it can make an a…”