Sales Meeting Prep

First sales meetings are an opportunity to introduce yourself and your company as potential future partners. These meetings are all about the message and telling a compelling company and product story. The goal is to create interest, not make a sale. Success out of first sales meetings results in clear steps for follow-up and an engaged, interested audience.

Creating Your Deck

The deck can be one of the trickiest parts of a strong sales meeting. Great decks engage an audience, while subpar ones can bore or repel. While developing the ideal deck takes time and many revisions, every company can have a solid deck from day 1. Here are a few suggestions on how to get it right.

Keep Your Deck Concise But Avoid Image-Only Slides

While Apple-inspired slides are popular for storytelling, they can be challenging to use when your brand and product are not yet well-known. On the flip side, text-heavy slides are tiresome to view and tend to divert the audience's attention. Aim to include the least amount of text possible while communicating your message. For slides that will be shared asynchronously, include additional details in the speaker notes or as additional slides to be sent after the presentation.

Avoid Running the Entire Meeting With Slides

While the bulk of the meeting can be about your product and company, it’s important to leave adequate time before and after the presentation for affinity building. This includes time for personal intros, discussing similar use cases from other customers, or next-step planning. Because it’s important to leave time for these conversations, aim to keep your deck to at most 20 slides and 30-40 minutes of presentation for a 60-minute meeting.

Include Supporting Slides But Move Them to the Appendix

While having a short, concise deck is essential, it's equally important to prepare for potential questions, objections, and example use cases. The appendix is a great place to keep these relevant slides without taking up prime presentation real estate.

First Sales Meeting Structure

60-Second Elevator Pitch

Time: 1 minute

Communicate a memorable overview of your product.

Your 60-second elevator pitch should not be a slide but your first message in the presentation.

A Good Elevator Pitch Should Include:
  • A big, relevant change in the world that your startup is solving.
  • Description of your product, value proposition, differentiators, and ROI.
  • Potential use cases (but ideally, you highlighted use cases prior to the meeting).
Company Overview

Time: 2-3 minutes

Provide a snapshot of your company & founders.

Your company overview should be a single slide that provides insight into the company mission and who makes up the team.

Company Overviews Should Include:
  • The team: Show why your team is best suited to build the product.
  • Your founding story: Make it succinct and impactful. The goal is to connect with the audience on a personal level while gaining instant credibility.
  • Investors: Gain the prospect’s confidence that you have sufficient backing.
  • Marquee customers: Subtly create FOMO and build credibility by association.
Product Overview

Time: 5 minutes

Create interest in the impact your product will make.

Product slides (1-3 slides total) should cover the problem you are solving, unique elements compared to the rest of the industry, and how your product will ultimately impact your audience.

Product Slides Should Include:
  • What problem are you solving? Unless the audience is technical, use a story or analogy to explain your product offerings.
  • How are you proposing to solve it? A summary of your solution and product.
  • What is unique about your solution? If applicable, highlight savings, ROI, ease of use, incremental revenues, etc.

Encourage discussion and questions. Be prepared to discuss pricing, if asked, and add applicable use cases if time allows.

Demo & Discussion

Time: 10-20 minutes

Engage in a dynamic discussion & Q&A.

The demo and discussion are the most critical parts of your presentation and where you should spend most of your time. It’s key to tailor your demo to your audience and leave space for them to ask questions throughout - don’t leave them all for the end.

Tips For an Effective Demo:
  • Be sure to have a plan beforehand that walks through all the key features you want to show.
  • Encourage dialogue and questions throughout.
  • If possible, let prospects take control of the demo.
  • Customize the demo to the prospect's unique use cases to make it as relevant as possible.
Evidence & Past Work

Time: 2-5 minutes

Back up your claims and show data.

While larger companies can benefit from well-known brands and a long list of customer logos, early startups rarely have that luxury. Because of this, it’s critical to show data and evidence that backs up your claims and highlight previous successes with evidence of past work. Be prepared to talk about similar use cases and your near-term product roadmap, and show customer testimonials and references.

Next Steps

Time: 1-2 minutes

Keep the door open for follow-up and future conversations.

This step is often an easy to overlook but is one of the most important. Don’t end the meeting without asking your audience how they would like to engage moving forward and what a timeline for a future conversation might be.

Best Practices For Outlining Next Steps:
  • Ask the potential customer for guidance on how they would like to approach next steps.
  • Gauge if there’s interest in follow-up.
  • If yes, identify point-of-contact and exchange information.
  • If not, ask if they’d like to touch base in the future.

Additional Meeting Tips

Pre-Meeting Prep
  • Appearance: Be mindful of how you are presenting yourself. While it’s great to let your company culture shine through in your presentation, it’s also important to try to mirror the culture of your audience. If the customer has a suit-and-tie culture, wearing a more business-professional outfit will signal you are a potential partner that understands their environment.
  • Planning: Plan ahead and arrive early. If your meeting is over Zoom, always call/text/email if you’re going to be even a couple of minutes late.
  • Devices: Make sure phones and other devices are on silent, desktop notifications are turned off, and any distracting apps or browser tabs are closed. Set your device in presentation mode and have your presentation deck ready.
  • Representatives: If you cannot bring a C-level or senior sales representative, bring a technical team member to the meeting. This executive or technical presence signals a high level of importance and commitment to the customer.
  • Start early: Be aware that you’re being evaluated from your first interaction with the prospective customer, even before the meeting begins. Be timely, professional, and attentive in all interactions leading up to the meeting.
  • Be strategic about connecting: While researching the company, perform a quick LinkedIn search of meeting attendees; be able to reference relevant past details of attendees and mention shared similarities to help build a connection.
During the Meeting
  • Opening: Be friendly and greet the group on a personal level with a few minutes of small talk before digging into the business purpose of the meeting.
  • Agenda: Tell the audience what you plan on covering so they understand the structure of the meeting and the topics that will be addressed.
  • Presentation tone: Be as authentic as possible; don’t be afraid to talk about your family, interests, background, or other memorable personal details.
  • Know your audience: Ask a few early questions to gauge your audience's level of interest and expertise, but do the majority of discovery beforehand.
  • Direction: Drive the conversation, but don’t talk continuously for more than 7 minutes. Include breaks to check in with the room and pause for questions.
  • Note-taking: Do take notes during the meeting. If you insist on taking notes on a device, make sure to call it out to the room, so they know you are fully engaged.
Handling Questions
  • FAQs: Get ahead of frequently asked questions by proactively presenting the information; encourage dialogue throughout the presentation.
  • Tough questions: If someone asks a question you are not ready to answer, note the question and come back to it at an appropriate time. Appreciate tough, critical questions or objections, and be gracious with your response.
  • Answering objectively: If a question refers to something your company/technology cannot do, don’t be afraid to be objective and upfront about it. It's okay to mention things you cannot currently deliver, but try to provide a vision or a roadmap for the future.
After the Meeting
  • Next steps: Establish next steps at the end of the meeting, such as the point of contact/project owner, any additional materials you need to send (e.g., a white paper or the slide deck), the next touchpoint, etc.
  • Further questions: Mention that you’re open to questions after the meeting. You can stick around for a few more minutes if necessary.
  • Handling feedback: Appreciate the feedback and don’t take critical comments personally.
  • Follow-up communication: Send a thank you note outlining potential next steps. Have a presentation deck and/or a “send along deck” ready upon request.

Comp & Incentives

Sales comp should be tightly tied to your company and sales strategy. While there is no one size fits all model, a well-designed plan takes the overall company stage, size, product market fit, and goals into consideration. If any part of the puzzle is off, this can drastically affect sales compensation and a rep's ability to succeed.

💡 Your sales team is the execution engine to get your product to market, treat them accordingly.

Tightly Tie Compensation to Company Goals 

Articulate company goals and targets and align them with your compensation approach.

Reassess Goals Often and Consider Quarterly Quotas

When you are early on with product market fit or entering a new sales environment, goal reassessments and quarterly quotas allow for quick changes to the plans and will help maintain motivation and retention.

Update Your Strategy as You Grow

Sales plans should be reassessed regularly and will change as the company grows, sales processes mature, and more reps join the team.

Define Incentive Plan Participants

Clearly define the sales teams' roles and responsibilities and who qualifies to participate in a sales plan. Only employees whose responsibilities are clearly tied to persuading customers to move forward with a decision should be included in a sales compensation plan.

Account Executive

Responsible for obtaining customer commitment and closing business. In very early stage companies, this role may do everything sales related. In later stage companies, the AE's role will be supported by additional team members.

Lead Generation

Responsible for generating leads to pass along to the AEs. This includes outbound (cold calling) and/or inbound (waiting for phone call/email contact) leads. Acronyms often used: BDR, LDR, SDR, OBR.

Sales Engineer

Responsible for assisting AE with technical aspects of sales. Work with the prospect’s technical team to secure a ‘technical win'. Also called a Solutions Engineer or Pre-Sales Engineer.

Building a Plan

A well-designed compensation plan motivates and incentivizes employees to do their best, is transparent and fair — clearly communicating to all sales teams how incentives are earned — and evolves as the business grows and changes.

Define Your Compensation Mix

  • Align the Mix to Influence & Responsibilities: The mix of variable vs. base salary should be aligned with role responsibilities. How much does your role influence the customer's decision?
  • At-Risk Plans Are the Norm: “At-Risk” (achievement of quota dictates compensation) plans are the common framework for sales comp strategies, and the mix will vary based on roles and responsibilities.
  • Reserve Aggressive At-Risk Plans for Sellers: While "At-Risk" plans are the norm, it's important to distinguish between Aggressive At-Risk plans and. Conservative At-Risk plans. Aggressive plans place a high percentage of total comp on variable incentives. These aggressive plans should only be used with employees who are directly responsible for persuading and closing new customers.
  • Equity Should Not be Variable: Equity is typically determined at the company and role level and should not be defined as a variable part of sales compensation plans.
  • Pay Mix Will Evolve Over Time: Your ideal pay mix will depend on your stage of company and will evolve over time (ex., all AE’s at Box are on a 50/50 mix comp plan because the sales process & timelines are well-established).

Designing the Plan

Well-built sales plans are measurable, quantifiable, and attributable. When building your plan, consider the following 8 elements:

  1. Eligibility: Who is and is not placed on a sales comp plan?
  2. On Target Earnings: How much money is earned when the rep achieves the target?
  3. Pay Mix: What is the mix of base salary vs. variable pay?
  4. Plan Type: What type of plan is used?
  5. Plan Measures & Weights: What is a rep reassured on, and what % are target incentives (TI)?
  6. Plan Mechanics: What payout method is used, and how much upside is provided in the plan?
  7. Performance Period: What is the measurement period?
  8. Payout Frequency: How often is the rep paid?

Typical Designs at Startups

Commission Rate:
  • Paying a fixed % per unit sold. May provide acceleration.
  • Best for: Early-stage startups before you know your targets.
  • Pro: Very simple.
  • Con: Can be very expensive if you set the rate incorrectly and may create challenges when moving to a quota.
Quota Based:
  • Quota is provided for each rep. Pays % of TI for each quota attained expressed as Individual Commission Rate (ICR).
  • Best for: Companies with sufficient data to properly set quotas.
  • Pro: Allows for precision and fine-tuning for market/territory.
  • Con: If you don’t have enough data to set a quota, you can be misaligned and demotivate reps. Plans can also become complex.
Management By Objectives (MBO):
  • Measured on quarterly objectives, may be sales results and /or deal-based milestones.
  • Best for: Flexibility and roles with long sales cycles (12+ months). Typically capped payout at 120-150% of plan.
  • Pro: You can reward on milestones and change incentives. For example, Letter of understanding, customer engagement strategy document (early stage), new logos, etc.
  • Con: Very operationally burdensome. You will have to revisit measurements quarterly.

💡 Tip: Use no more than 2 plans at any given time. Over time, try to move all reps to quota-based and retained MBOs for unique sales cycles (government, banking, etc.).

Design Tips

  • Use no more than 2 plans at any time.
  • Plans should shift and evolve over time as the business grows and product market fit is found.
  • If the geography dynamics are similar and labor allows, comp plans can span multiple geographies and countries. The key is to ensure the roles and sales cycles are the same.

Elements of an Effective Plan

  • Simple and Easy to Understand: Reps should always know what they are being measured on and how their quota achievements affect compensation.
  • Aligned to Business Strategy and Job Roles: The plan should have clear ties to publicly available company goals and initiatives.
  • Plan Measures Have a Clear Line of Sight: Reps should have a clear ability to influence the outcome and trajectory of their comp through successful outcomes. Tying sales compensation to something the rep has no control over is extremely demotivating (e.g., profitability when the rep can't control pricing).
  • Motivational With an Appropriate Amount of Upside: Ensure that the projections made about the upside are closely tied to reality. A significant chasm between projected upside and actual upside can result in retention issues.

Scaling Your Team

The key to hiring your first rep and, eventually, scaling your sales team is to identify your overarching sales strategy and goals but stay flexible and adaptable as your sales team evolves.

  • Hire the Right Person: Hiring the wrong person can set you back months in company progress.
  • Keep it Simple: Start with a simple plan and scale as you go.
  • Measure the Right Things and Don't Box Yourself In: Don't overcomplicate the plan or create a situation where the rep is bound to fail. First reps have a hard role and often face numerous hurdles to successful outcomes (still finding product market fit, undefined processes, untested pricing structures, etc.). Create a plan that focuses on moving the company and product forward and iterate on this over time.
  • First Rep Incentives: There are a number of plan options available for a first sales rep, but typically we see companies choose one of the two models below.

Plans as the Team Grows

As mentioned before, keep the plans simple and aim for a plan that encompasses the broadest range of roles & responsibilities. Below is simplified guidance around typical plans seen for a mid-stage company. We recommend using this as guidance, not as an exact template.

Unexpected Circumstances & FAQ

Responding appropriately to unexpected events is critical to ensure you keep your sales team “in the game” and provide motivation during difficult times. Below are some suggestions for dealing with headwinds vs. tailwinds.


  • Quotas are now too high.
  • Salespeople's income is in jeopardy(even more than normal).
Response (pick one or two):
  • Reduce quotas
  • Provide additional quota credit.
  • Add acceleration below goal.
  • Utilize SPIFFs and sales contests.


  • Quotas are now too low.
  • Payouts are much higher than expected.
Response (pick one or two):
  • Live with it!
  • Utilize windfall clauses where appropriate.
  • Limit credit in any one month or quarter.
  • Limit total pay in the year & pay the balance in a future year.
  • Reduce acceleration above goal.

Additional FAQs

Performance Periods

Should I measure sales reps quarterly? Semi-annually? Annually?

It depends on your sales cycle and how well you can set goals into the future. Ultimately, it’s a tradeoff between short-term flexibility of a quarterly performance period and exposure to potential overpayment due to a short period.

How do I motivate a rep when they have long sales cycles and aren’t expected to close anything for 6 to 12 months?

There are two primary options for this situation:

  1. Implement a less aggressive pay mix to recognize reps will take a long time to close business.
  2. Use an MBO-based plan that measures results leading up to deal closure.

Crediting & Payment

When should I pay commissions? At contract signing? At invoice? When cash is received?

You should pay the sales team as close to the deal closure as possible. If you don’t have problems making the contract “stick,” pay at signing. Otherwise, pay at invoice. Avoid waiting to pay until cash is received if it can be avoided (i.e., a loan that is repaid from future commissions). Most SaaS companies pay some type of draw, and it varies based on market position and expected ramp time.

How should we think about and use Sales Performance Incentive Funds (SPIFs)?

Think of SPIFs purely as a short-term incentive that can drive sales behavior in a month or quarter. Target them at a specific product or performance level in conjunction with the regular sales comp plan. Use wisely, or they can become the sales comp plan!

Plan Design for Other Roles

How should we compensate Customer Success roles?

It comes down to the tasks you are asking a CSM to perform: Customer Adoption? Renewals? Add-on Selling or upselling? Based on this answer, you can choose the right plan design. The more “salesy” the CSM role, the more it should have an at-risk plan design. Otherwise, go with an add-on bonus plan.

How should we compensate Lead Generation roles?

Typically these roles are measured on one or more of the following:

  1. Meetings Scheduled.
  2. Qualified Sales Opportunities.
  3. Pipeline Generated None of the above measures is perfect, so realize it is a bit imprecise and that lead generation roles are typically stepping stones to other sales roles.

Adjusting the Plan

Should I adjust quotas?

Each situation will be a bit different, but here are some aspects to consider:

  1. Shorter performance periods allow for easier adjustment of quotas.
  2. You always want reps to have their heads “in the game” and be motivated to achieve.
  3. If events are beyond the rep’s control, you should strongly consider adjusting quotas OR alternatively providing extra quota credit retirement.

Additional Resources

Websites & Blogs

Sales Contracts

Special thanks to Danielle Hedden for collaboration in developing this resource. For more information or office hours with Danielle, see her Operator Network profile here.

Contract management is an integral part of the sales cycle. Developing a process around creating, approving, and renewing sales contracts will dramatically decrease your time to close and improve your renewal process. This guide will cover the basics of sales contracts, why they’re important, and how to work with legal to enhance your contract management process.

What Are Sales Contracts? 

A sales contract is a binding agreement between a company and a client. It ensures the delivery of your product or service(s) in exchange for payment. From the initial contract request and approval through renewals, amendments, and expirations, a strong sales contract process will ensure your company is maximizing its sales cycle and providing a quality customer experience. 

Why Are Sales Contracts Important? 

Sales contracts are the foundation of successful partnerships. Whether it's a small-scale transaction or a large-scale purchase, all companies can benefit from a structured contract process. 

Effective contract management can offer several key benefits: 

  • Increasing the predictability of your company’s business transactions, earnings, and revenue margins
  • Minimizing risk and protecting your company’s interest in the event of a disagreement with a customer
  • Helping to acquire more customers and increase sales velocity and volume

Most Common Types of Sales Contracts

Sales contracts provide protection and clarity to both the company and customer. There are many types of sales contracts, but the following are the most common:

General Sales Agreement

A written agreement between you and the customer specifying the necessary information to sell your product to the customer. This information includes (parties involved, how the services are being delivered or implemented, liability terms, etc.

Order Form

A standard ordering document that lists the products or services a customer is buying from your company. It includes any special terms related to the purchase and references MSA standard link terms or an executed MSA. Once the form has been accepted and signed by both your company and the customer, it becomes a binding agreement. 

Master Service Agreement (MSA)

An agreement signed by you and the customer that sets expectations for an ongoing service or a long-term business relationship. It serves as a framework for future transactions between you and the customer and helps ensure both sides have a clear understanding of their roles and responsibilities.

You can see an example of business terms used in an MSA here

Professional Service Agreement (PSA)

Generally used when a customer wants to hire a highly skilled consultant with specific qualifications, high-level experience, or certain technical capabilities. It lays out general terms and conditions between you and the customer, and a separate document called a Statement of Work outlines the objectives, deliverables, and timeline of the project. PSA can be used in conjunction with a MSA to help assist the customer with the use of the service purchased. 

Statement of Work (SOW) 

An agreement that outlines the scope of work and deliverables for a project or service. 

Note: A PSA covers more general terms and is open-ended and a SOW is not. SOWs should be specific and changes need to be made through change orders.

Change Order Form

A document used to modify or amend an existing SOW.

Master Partner Agreement (MPA)

Typically used when onboarding strategic partner relationships. The MPA sets out general terms and conditions of the partnership and includes exhibits to specify the type of partner relationship (reseller, systems integrator, training, etc.).

Elements of a Sales Agreement

A strong sales contract is straightforward, reduces risk, and ensures a positive outcome for the company and customer. The main components of a well-structured sales agreement include:

Parties Involved

Details about the buyer and seller, such as names, addresses, and contact information.

Payment and Term Details

The terms of the service/product, any applicable renewal terms (i.e.,  automatic, notice period) , the due date of payment, late payment fees, and tax responsibilities. All fees are typically set forth in the applicable Order Form and/or SOW. 

Description of the Product or Service

The scope of the product or services that are being delivered, ​​including the license grant and restrictions, documentation and user guides, and any applicable support and maintenance.  The documentation also describes technical and operational measures the company takes to protect customer data and can vary by product.


How the seller will provide the product or service, including any applicable support or warranty terms (you can see examples of what types of support and warranty terms may apply in the MSA example above). 

Risk Allocation Terms

Outlines liabilities, indemnities, or other risks involved and the responsibilities and obligations of your company and the customer. 

Confidential and Proprietary Rights

Limits the distribution of confidential or proprietary information, including non-public data. Some customers may require a Non-Disclosure Agreement (NDA) prior to engaging in more in-depth discussions with the company during the sales cycle.


Describes how the buyer and seller will resolve any disagreements, including governing law, jurisdiction, and venue if necessary (see MSA example for more context).

Sales Contract Management

Most startups don’t have a well-tested process for moving an interested customer from contract request to signing. Without a proper process, the timeline for a signature can take much longer than intended, putting the entire sale at risk. To mitigate these delays and streamline the experience for the customer, we recommend implementing a structured contract management process from Day 1.

In addition to streamlining timelines, contract management supports an effective renewal process, ensures proper documentation and compliance, and creates a tight working relationship between legal (inside or outside) and the sales team.

The Contract Lifecycle

The sales contracting lifecycle closely resembles the sales lifecycle, moving from a contract request to renewals and expansion.

→Contract Request

The customer requests an agreement for your product or service.


Drafting and sending the contract to the client.

→Negotiation and Approvals

The back-and-forth process of redlining and discussing the terms of the contract including obtaining all necessary approvals.

→Signature & Storage

Once the contract is finalized, it's sent to the customer for signature. 


After the contract is executed, store the document in a CLM (referenced below) or organizational tool that’s visible to cross-functional teams so they can properly onboard the customer. 


Once a new customer is onboarded it is an ongoing obligation to manage, renew, and keep up with changes to the contract.


Periodically, contracts should be reviewed to add any new compliance or regulatory requirements as well as ensure both parties are continuing to receive value from the agreement.


During any term or renewal period, you and the customer can extend the term or add more or new products to the existing contract.

Develop a Contract Management Process

Have a contract management process that's clearly outlined for sales, cross-functional teams, and anyone involved in executing sales contracts. Building contract guidelines will allow you to set and manage expectations about the process early on with customers. 

Note: You will likely need to work with outside or in-house counsel to set up this process. They will have more experience and insights to ensure compliance. 

Outline Your Contract Management Flow 

To efficiently manage your sales contracts, it’s important to first identify the types of sales contracts  your company will typically manage and the specific processes and requirements that are involved in each type of contract. 

Next, map out the steps involved in the contract management process for your company, from initiation to execution to renewal or termination (you can use the contract lifecycle section above as a starting point). By outlining this process, you can identify and address any bottlenecks or inefficiencies

Determine Your Stakeholders

Determine all of the individuals and teams that will be involved in the contract management process, including sales, legal, finance, etc. Clearly define the roles and responsibilities of each team or individual involved. This will ensure everyone knows what is expected of them and can effectively contribute to the process.

Track and Monitor All Sales Contracts

All contracts should be easily accessible and organized in a repository or database. It is ideal to invest in a contract lifecycle management system  (CLM)  that integrates with your existing CRM even if just using basic functionality. 

The main benefits of having a CLM are: 

  • Improved Efficiency: A CLM system automates many of the manual tasks involved in contract management, such as document creation, routing, and approval. This can help reduce cycle time and improve overall efficiency.
  • Increased Visibility: A CLM system provides a central repository for all of an organization's contracts, making it easier for teams, particularly as you grow and hire more people, to access and track the status of contracts.
  • Better Collaboration: Allows for more collaboration and communication between sales and legal, enabling faster decision-making and closing contract deals. 
  • Reduced Risk: Minimizes risk and errors by making sure the latest contracts have been reviewed and signed.

Existing sales CRM may already include CLM capabilities, and you can upgrade to a more robust version as you scale.  

While a formal CLM is the ideal choice for teams with a consistent sales pipeline, for earlier stage companies it’s still recommended to use some organizational tool (CRM or project management tool) and upgrade to a CLM as you run into inefficiencies.

Create Templates and Resources for Your Teams

Have templates, FAQs, playbooks, and training in place to give team members tools and guidelines to engage with customers and address customer needs and expectations.

In your later stages, you can include sales contract training and materials in the initial sales onboarding as well as continue to provide ongoing training to those teams. 

Below is an example outline of what to include in your training materials: 

  • Type of Commercial Contracts: Includes all relevant agreement types and when used
  • Master Subscription Agreement template (“MSA”): Discusses the use case that falls under the MSA and include a chart for sales to easily determine if this is the correct agreement type for their customer
  • Order Form and MSA Process, Including:
    Order Form Review: This is a critical stage in the process that can reduce time-to-close drastically. For order form review, train your sales team to reference the MSA standard link terms included in the Order Form when a customer requests the agreement for review. 
    MSA Request and Approval Process
    MSA Redline and Negotiation Process
    MSA Execution Process
    MSA Email Templates
    Standard MSA Business Term
    FAQs for Customer
  • Constantly Modify and Amend your Process to Reduce Cycle Time: Iterate on your process and see where you can revise and eliminate friction.

Common Challenges to Anticipate 

Every stage in the contract lifecycle has a set of unique but predictable challenges. As you build your company’s contract process, develop measures that can be taken to address each of these challenges BEFORE they come up in client conversations.

Clients Want to Use Their Own Contracts

It’s common for larger companies to attempt to gain leverage in negotiations by sending their own contracts developed by in-house counsel instead of using your agreements. Part of this is risk mitigation, and part of this is trying to leverage more favorable terms. It is important to equip the sales team with talking points to explain how using the customer's contract will create more risk for the customer and provide unnecessary delay (you can include this language in email templates and training materials referenced above).

Ensure that your contracts are developed well before the client requests the documents. Work with your legal team to build easy-to-navigate contracts that can be shared before deal terms are finalized.

Specific Industries May Require Additional Terms

Depending on the customer industry; customers may need certain security certifications or specific  language included in the contract. They may also require a different type of license grant or a different type of agreement than anticipated, which may cause a longer negotiation and approval process.

While it might not be possible to get ahead of highly specific contract terms, it’s important to try to build contract playbooks that address the common needs of clients by target industries (i.e., govt, healthcare, NGO, etc.).

Lengthy Approval Times

Contract negotiation times will vary by customer and industry; some contracts can take as long as 18 months, while others can take as little as a week. The important thing is to invest in your contract process and collect data about typical timelines by customer type. This will help your sales team to set expectations and effectively anticipate and manage redlines and areas of pushback.

Getting Started Before Contracts Are Signed

There will be times when a customer is in a rush to purchase and begin their project and there is not enough time to negotiate the agreement as intended.

In this scenario, you can prompt the customer to purchase the minimum amount necessary with the minimum term allowed under the standard MSA link terms included in the Order Form to ensure both you and the customer will come together quickly to negotiate a new MSA prior to the next purchase.

Contract Management Best Practices

Act as if You're a Public Company

Avoid side deals and follow the outlined contract guidelines. Compliance issues can result in delays and roadblocks for a potential IPO or acquisition down the line. Make sure your contract database is built out and always ready for an audit.

Ensure Collaboration Between Sales and Legal

Create a two-way relationship with sales and legal. The more the two are intertwined, the more you can drive growth.

Measure Your Progress

Identifying areas in your contract lifecycle that are prone to delays and analyzing how much revenue your contracts generate will help make your contract process more efficient. Here are a few metrics to keep track of when first developing your contract management process:

  • Renewal Rate: The percentage of customers who renew their services. This is an essential metric for tracking customer retention.
  • Total Contract Value (TCV): How much a contract will be worth to your company over the course of the contract’s duration.
  • Time to Close: Tracking how long it takes from the contract request to execution. This will help identify pain points and friction in your contract workflow. Can also provide metrics on time to close by size of deal, company size and/or industry. These metrics can be shared in your contracts process, guidelines, and training to set expectations with the sales team on average time to close.

Working with Outside Counsel

In the early stages, creating agreement templates, outlining your contract process, and closing deals may require working with outside counsel.

When leveraging outside counsel, make sure they have a direct line of communication with relevant internal teams to learn about your specific business and products. This may involve building a relationship with your sales leadership, CFO, and overtime in-house counsel.

Once familiar with your product or service, they can create various centralized contract playbooks to be utilized by teams to help expedite the process. They can also generate additional agreement templates, a contract repository, email templates, and internal sales and customer facing FAQs to help negotiate with customers.

What to Look for in Third-Party Counsel

You may want to work with the same firm that helped incorporate your business. Another option is to  start with a firm that is known for dealing with sales contracts, like DLA Piper or Baker McKenzie.

Lightspeed has a list of lawyers that many portfolio companies have worked with over the years that can be found here.

Scaling the Legal Function

While outside counsel may help with early support, they can often cause unnecessary roadblocks in the sales contracting process. Hiring an in-house counsel can shorten cycle times and create tighter integrations with the sales team resulting in a more efficient deal process and a higher customer close rate.

When to Hire In-House

Here are some indicators that you would benefit from bringing your legal team in-house:

  • Your primary customers are large enterprises.
  • The amount you're spending on outside legal support exceeds the amount for an experienced in-house counsel. The goal is to make better decisions faster which an in-house attorney is much more capable of achieving.
  • You’re anticipating an accelerated increase in the volume of transactions and want to make sure you are able to meet demand. 

In addition to contract volume, if your company is larger than 100 employees and the sales team is continuing to grow then an in-house team is likely needed to provide bandwidth and support demand.

What to Look for in Your First Legal Hire

When hiring a General Counsel, look for a GC with corporate experience at a startup or fast-paced company.  While they should have the knowledge to help the company navigate other areas of risk, their main focus should be supporting the sales engine in closing deals and establishing processes for developing your legal team as you grow.

Sales & Legal Partnership Over Time

In an ideal partnership, sales is empowered to manage new client agreements with very little legal involvement. The legal team can provide this flexibility and independence to sales by creating tactical information and tools to help them negotiate with the customer, such as pre-approved or fallback terms, FAQ pages, guidelines on contracts process, sales email response templates, etc. Legal should also run regular training on contract terms and processes.

The goal is for sales and legal to work collaboratively, getting ahead of extensive redlines and changes and anticipating roadblocks. This close partnership will lead to a smooth and straightforward approval process.

Here are some common challenges that can arise when sales and legal teams work together on contracts, and some ways to overcome these challenges and improve collaboration.

Templates & Resources

Contract Repository

Early startups can streamline their contract management by implementing a contract lifecycle management system or creating a contract database. This will provide an internal, centralized repository for all contracts and ensure visibility.

Contract Playbook

A contract playbook lists the terms and conditions of typical contracts and provides the legal team with guidance on alternative or fallback provisions and any applicable approvals required. Playbooks are critical in ensuring the legal team can work independently, reducing delays and friction during negotiations.

A good contract playbook provides negotiation guidance for each term in the contract including potential customer issues, information/background on what term means and why it is important, alternative language/fallback clauses and required approvals.

You should create separate playbooks for various agreements and templates (MSA, MPA, PSA, DPA, Order Form for Product and Business Special Terms, etc.). 

Agreement Templates

Have your outside counsel or legal hire create agreement templates and playbooks early on to provide consistency across contracts, reduce contractual risk, financial or otherwise.


Other Resources

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