Experience the Power of a B2B SaaS Sales Model in Legal Agreements

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good afternoon thank you for joining today my name is shahed kater i am managing attorney at law office of ks cater also known as cater law today's webinar is about six key considerations in enterprise sas sales deals uh quick note about this webinar nothing in this webinar slideshow and presentation is to be taken as legal advice if you are seeking legal advice please contact your attorney if you are not familiar with my webinars they are quick they are about 15 minutes uh and they cover the basics of what you need to know about the subject matter and today's subject matter of course six key considerations and enterprise sas sales deals if you missed this webinar live it will be up on my youtube channel immediately afterwards once again my name is shah head cater i'm licensed to practice law in washington dc in maryland i my practice uh cater law specifically focuses on software and data privacy law and my clients range from early stage startups all the way to publicly traded companies where i served uh as a privacy council or a commercial council so negotiating sas agreement software as a service agreement with enterprise customers uh when you're negotiating a deal to sell your sas product to an enterprise company you've got to keep a few considerations in mind the enterprise companies they know they know they're big they know they'll they can they have some weight in getting what they want out of the deal and they'll likely push their weight against your smaller company in negotiating terms but if you go in prepared with what to expect uh you'll have a better chance of closing the deal in a quicker timeline and also a better chance of coming out with favorable terms for both parties um you don't want to get rolled over you also don't want to promise something that you just can't keep because that's going to end up being a bigger problem for you so again this webinar will outline six key considerations in enterprise sas sales deals first uh one thing you need to understand is you will likely more likely than not be negotiating their paper their master services agreement enterprise companies have defined procurement systems they have procurement teams they have attorneys contract managers so on and so forth and they have a host of msas for different types of services that they procure you need to understand is it's highly unlikely that enterprise company will agree to your paper to your contract go in expecting that they'll be sending you an msa and you'll you'll have to add your most important terms in as an exhibit in the document or as red lines of the document um the reason for this of course is enterprise companies of course they they need to work a little bit quicker too so if they have a hundred different uh 100 different vendor agreements uh it's easy it's where it's more difficult for them to keep track of the specific terms they need to keep track of despite any contract management systems with an ai built in so uh they build these msas with their favors in mind with their favorability in mind and it's it's designed to be more favorable to uh the enterprise that you're working with the only issue is sometimes there are terms and they're just not very favorable to you and we're going to be discussing a few of those right now so understand outright you can send your contract all you want but more likely than not they will be sending you a master services agreement for the supplier relationship that they have with you two uh expect strict data privacy requirements and agreements to sign uh data privacy is an increasingly important topic and enterprise companies don't want to deal with the heavy fines or violations especially because you're going to be a vendor the chain of liability nature of data privacy regulations where breach by you was approached by them means that your enterprise customer will require you to sign a strict data privacy agreement likely also an information security or security addendum along with specific instructions on how they want you to handle their data uh what's important here is you need to review these carefully and do not sign if you can't do what you're saying you're doing what this means is uh more often than not you'll you'll essentially be getting a stock document that really doesn't specifically relate to what your product offers and so because of that there might be terms in there that just may not apply to you so what you want to do is carefully review any data privacy agreement most of them are standard but there are some terms in there that could be uh edited and any security addendum in which that you in which uh they set forth requirements of security requirements whether it's administrative technical uh uh and physical safeguards uh for you so think of it this way if your sas company is providing you know a software as a service product for recruitment versus a software as a service product that handles their entire infrastructure um the requirements might be a little bit different so make sure you review carefully see what's applicable to you and and once again in bold review these carefully do not sign and do not agree to anything if if you can't do what you're saying you're doing number three expect negotiations and indemnification limitation of liability and termination provisions enterprise companies know that you want their money and so they'll likely request that you do that you indemnify them entirely for third party infringement claims without doing the same back for you it's not going to be mutual most of the time said no limitation of liability for specific car routes uh and allowed them to terminate for convenience while getting a full refund back these are terms that i've seen in enterprise master services agreement sent to my clients which are sas companies um what you need to understand is these are negotiable negotiate these terms some of these asks are far-fetched are far-reached if you push back with a sound case you can come to a mutual agreement usually what's going to end up happening is you can come to an agreement on mutual identification you can come to an agreement on what carve-outs are applicable to a limitation of liability and termination specifically uh especially if you are a software service company that charges on an annual basis and you report your earnings on an annual recurring revenue uh system uh it's not in your best interest to allow a company to uh terminate the agreement within three months for convenience so based on that you would probably want to redline out any termination for convenience uh writings and and and come to an understanding as to why that's important explain why that's important come to a better way determination for breach is fine but termination for cause is okay determination for convenience that's not something that you would want to agree with once again review these sections specifically in the master services agreements number four make sure that they understand that end users are bound to your terms of use and privacy policy all software as a service companies generally have a terms of use a privacy policy uh built in and if you don't you should probably get those in place the msa your enterprise customer sends you over will be the governing document of your relationship but you need to make it abundantly clear that you have a terms of use or terms of service if you have a privacy policy and it's not only applicable to your customer but to any additional any potential end users uh if you're if you're for example a b to b and b to c company this may become a point of contention i've seen this become a point of contention but it's it's it needs to be clear uh and you need to adequately and accurately explain why your terms are important to you and to them your terms uh contain provisions around use restrictions it can it contains provisions around now how can you terminate a service what you're allowed to do what you're not allowed to do so on and so forth uh your privacy policy obviously governs how you handle the data that you're you're processing uh for your customer and your for your end users so those need to be incorporated um if the msa you know if you do add this to the msa and when you do add this to the nsa your enterprise customer will require a required request to review your terms and privacy policy that's where it gets a little bit sticky because if you make specific uh red lines and exceptions for an enterprise customer it's just going to be hard for you to manage and understand and remember from a contract management standpoint what you've agreed to what you've not agreed to for that specific customer number five expect strict service level agreement requirements sla requirements enterprises will demand 99.9 uptime at a minimum and they'll often send over a standard sla as a part of their msa um do not commit to anything that you cannot commit to these are sometimes negotiable and you must be able to lay out and define what your actual service commitments are uh so remember you'll likely get an exhibit that's an sla in addition to the msa that they've sent over to you and it is up to you to go into it uh with your msa with your sla i'm sorry and and and compare and contrast ingly have an sla ready make sure that they understand this is the service level that you are willing and can provide and this and anything above and beyond that it shouldn't be part of the agreement it should be something that's uh that's edited out and number six uh finally expect a longer sales cycle enterprise customers are working on a bunch of different sales and vendor deals at the same time their legal teams are always backed up they're not going to be as quick as yours so expect a longer sales cycle uh more often they're held up by legal mitigate this by finalizing all business terms or try to finalize all those business terms before you get into the msa negotiations that way the business review itself is done it's just up to legal to close the deal um these considerations that i've laid out for you should give you a good understanding of how enterprise companies expect their vendors to react or what kind of agreements they're going to send over to you or what the procurement process is going to end up looking like it's important to understand these things because that's what you will be held to ultimately um so expect a longer sales cycle try to mitigate this by getting as much done in the front end from your sales person to the to the deciding person uh to the person that you're selling to ahead of time with the business terms and as far as legal is concerned go into it understanding that it's likely going to be their paper it's likely going to have some terms that are not favorable to you especially around identification sometimes it's around intellectual property ownership and so on and so forth so understand that this is the stuff that you're going to actually have to go with um and best practice honestly is to make sure that your legal team has a playbook around this have a playbook around understanding uh what an enterprise customer is looking for what they will be negotiating and what standards that they're going to be setting for that concludes today's webinar once again um nothing in this webinar slideshow and presentation is to be taken as legal advice if you're seeking legal advice please contact your attorney thank you again my name is shahed kater i'm licensed to practice law in washington dc and maryland my practice caterer law specifically focuses on software transactions and data privacy law i appreciate your time thank you very much you