Editor's note: Dror Futter is a partner in the Rimon, PC law firm, where he is a member of the firm’s Venture Capital, Blockchain and Israel practice groups. He advises growth companies and their investors on both their financing transactions, as well as their daily commercial, corporate and IP needs.
Sometimes it just feels unfair. Your big Fortune 500 customer has agreed to buy your product, and all that remains is for the purchasing department to send over their form agreement. High fives all around. Then with a thud, a 40 page document lands on your desk. You can almost hear the air seeping out of the deal.
When you are a startup, the reality is that in most circumstances you need the deal more than your customer. In addition, it is very likely that your customer – with their in-house purchasing and lawyers – has more resources it can devote to negotiations. You may also have to hire an attorney on an hourly basis, and lengthy negotiations can distract important management, product, and sales resources. Finally, speed is critical to a startup and taking tough contract positions will inevitably delay closing. The net of this imbalance means that it is likely you will have to live with an unbalanced contract.