3 Things to Consider in your Software Referral Agreement

While there are many different issues to include in a software or software services referral agreement, here are a few practical issues to consider for any company looking for growth capital or growth equity. 

1) In/Out. What types of referrals will be paid, and what types won’t? Don’t forget excluding transactions that are already in flight or that don’t close within x amount of time. What about extensions to the original transaction? In my experience, most of the disputes relating to referral agreements are around this issue, so be super clear about this. 
2) Payment/Reporting. Do you want to pay on each transaction, or on a monthly/quarterly basis under a report? Also, don’t forget to address credits or returns. 
3) Simplicity/Plain English. Keep this agreement simple, and short, as you want to make sure (a) your partner understands the agreement, and (b) your internal sales/channel teams understand it too. Tell your lawyer this, as they may not be thinking about a short and simple agreement written in plain English. 

Just a few thoughts from a venture capital advisor for any software based company working on its business growth strategies.