Updated: May 11, 2022
This is the third post in our “Meet the Bincubators” series, in which we interview notable professionals who are helping entrepreneurs and small businesses to grow and succeed. Our guest today is Jenevra Georgini, Founder of Spark + Sterling – which offers strategic and legal support to entrepreneurs, making it easier for them to build lasting relationships with large companies.
Jenevra, welcome. Can you tell us a little bit about your background and how you came to found Spark + Sterling?
Sure – my background is in contracts and copyright, and I’ve been a transactional lawyer for 25 years. I started at a firm that focused on tech law, and then led a legal group at AIG, the insurance giant. My team at AIG negotiated the company’s purchasing agreements, closing about $50-100 million in deals annually.
At the same time, I got involved in mentoring startups. One question I heard often was, “I’m about to sign up my first big customer. What do I need in my contract?” I saw an opportunity to build bridges between entrepreneurs and large customers, and so Spark + Sterling was born.
And what kind of services do you offer to small businesses and founders?
I negotiate contracts for small businesses to sell their goods and services, especially to large companies. Navigating a big customer’s buying process can be confusing and time-consuming. I handle this part of the relationship so my clients can focus on what they do best.
I also advise on issues that come up after an agreement is signed: compliance, privacy, intellectual property rights, and more. Depending on how these issues are managed, they can be bureaucratic nightmares, or opportunities to keep your customers happy and your contracts profitable.
In some cases, I help founders set up their companies. This can include refining their business model, forming a corporation or LLC, or launching their first website. I’m always happy to talk about business ideas, so if you’re reading this and thinking about starting a company, feel free to reach out!
Established players often look to young companies for specialized knowledge and new ideas.
Perhaps a young company may not yet have considered the b2b potential of their business, and may still only be focusing on direct-to-consumer business. Are there any kinds of companies, or perhaps specific types of products/services offered, which might be best suited for potentially building lasting relationships with large companies?
I’ve seen all kinds of companies build solid relationships with large customers, as long as they’re solving real problems for those customers.
Established players often look to young companies for specialized knowledge and new ideas. As a startup or small business, you might be on the cutting edge of a technology the large company wants to use, like blockchain or AI. Or you might know how to market to someone your customer wants to reach, like social media influencers. Maybe you have a great track record of developing employees’ skills, or recruiting diverse talent.
In other words, you’re an expert in an area that the larger company doesn’t have the time or resources to pursue in depth. You’re solving their problems, and dealing with new issues before they become problems – which makes you immensely valuable as a provider.
Can you give us a few examples of the ways in which small businesses have contracted with large companies (specific types of business and specific products/services)?
Often, a large company will outsource a service that the smaller company can provide more effectively. Some examples of this are:
A TV studio contracts out the visual effects work for its shows, because their own designers are busy with other deadlines.
A bank engages cybersecurity consultants to do regular penetration testing, as the consultants are more familiar with the latest security threats.
A grocery store licenses supply chain data on different types of foods, since it would take too long to research and format this data in-house.
Another scenario is when a large company wants to venture into a new area without too much cost or risk. For instance:
A health insurer does a proof of concept with a SaaS provider, experimenting with using the software to flag cost overruns in one area of the company.
A fashion company collaborates with an artists’ co-op on an NFT drop, to create buzz around their latest collection.
These shorter-term contracts can lead to longer-term outsourcing relationships. Both types of agreements can offer a great return on investment for both parties.
Are there certain factors that might make a company "ripe" for this kind of strategy? You hear it all the time, e.g., on Shark Tank, where the sharks go "out" because the entrepreneur hasn't quite done enough of the prep work to be in a position for them to step in. Are there parallels to be drawn in this context and, if so, what are some of the foundational building blocks that a company should probably have in place before they start to think about marketing and selling to large companies?
Absolutely. Working with a large company means investing in people and equipment, but also in processes. This can be a bit of a culture change; smaller companies, by definition, are usually less formal. Sometimes they aren’t ready for the sheer volume of meetings, documentation, and consensus-building that has to happen with a larger customer.
If you’re a founder looking to engage with a large company, you may want to think about putting systems in place for compliance, project management, communications, IT security, and anything specific to your industry (like service levels, or quality control). Customers may be asking about these systems before you even start discussing a contract.
If you haven’t already, you’ll want to delegate so that the C-level team isn’t handling every request that comes in from your large customer. It can be nerve-wracking to onboard workers before booking the business, but there are lots of options now for hiring contractors and even automating some tasks. With some careful planning, a small company can definitely make it work.
Similarly, should clients already be at a certain level of progress in any way before they come to you, in order to take full advantage of your services? Or are there services that you also offer to someone who may just be starting out, possibly even just at idea conception, pre-launch?
Most Spark + Sterling clients have substantial revenue and are looking to close a deal that will increase their annual income by 10% or more (sometimes much more). They may have just closed a seed round, Series A, or other early-stage investment, or they may be a thriving privately owned company.
That said, some clients are definitely at the idea stage. In addition to advising on business models, I’ve found I can add value for a founder who’s thinking about contracts early on. They might need to license technology or content from third parties before they can make their own product. Or they might need to set up supplier and distributor relationships as part of their go-to-market strategy. I can draft these agreements and create a plan for negotiating them efficiently.
Let's talk due diligence. I know your team helps clients prepare for the questions they will receive from a larger company looking to purchase products or services, or invest, and that many details go into this. But are there any basic tips you can share about how to move smoothly through this process?
Due diligence is where you can show that you truly understand the pressures your customers are under from their own customers, their board and their regulators. Large companies typically want details on your financials, tech stack and compliance procedures, plus social proof in the form of customer references or personal connections. If you share any of your company’s confidential information, you’ll want to protect it with an NDA.
The process can last several months. There may be several rounds of meetings with different departments and levels of the large company, plus demos, plus budget approval. It’s important to remember that the large company hasn’t committed to you until you sign a contract, so during due diligence you should continue looking at other opportunities.
Engaging with a larger company can be great for a small business but, then again, bigger doesn't necessarily mean best. What are some basic considerations that a small company needs to consider to make sure that this company is the right fit for them?
Great question. A small business should perform due diligence on their customers, just as their customers do on them. Finding the best fit will depend on your company and your deal, but here are some things to consider:
Is the large company offering a win-win agreement, or just trying to get “the most for the least?”
Is it easy to communicate with your contacts at the large company? If your main contact leaves or changes roles, can you build good connections with other decision makers there?
What are some benefits for your small business, other than financial? Will you get insights into how your product performs in different environments? Introductions to other potential customers?
The best relationships are the ones that let you grow alongside your customer. If you imagine your work together over the next 1-5 years, is there a clear growth path for both of you?
Helping clients craft effective pitches and presentations before large companies is one of the services that you offer, and of course a lot goes into doing that. But can you share perhaps just 2-3 general thoughts on some of the components that make for a successful pitch in this context and how small businesses can make sure they are as prepared as they can be?
A successful pitch will focus on what your company can do for the customer, and what makes your company the right one to deliver. As they say, “sell the benefits, not the features.” Sometimes a founder falls in love with their solution and spends too much time explaining how it works, instead of showing the potential customer how it will generate income or save them money.
Also, how you present can be just as important as the content. Try telling stories, rather than just sharing statistics. (Tania, I’m sure you could give founders some tips on this!) Talk about the results you’ve gotten for similar customers.
Finally, be aware of timing when you speak – you may get cut off if you run over, and you may be seen as low-energy if you don’t use all your time. Be ready for interruptions and questions; a curious audience is a good sign.
A successful pitch will focus on what your company can do for the customer, and what makes your company the right one to deliver. As they say, “sell the benefits, not the features.”
In this context, when large companies are engaging with smaller ones, does the larger company always drive the contracting process – that is, hand you their vendor contract as opposed to being open to considering yours? How much negotiation room is there, typically, and do some industries or types of situations typically offer more room than others?
Yes, larger companies typically have their own template they’ll want to use. This is understandable, since they engage with hundreds of providers and want their process to be as efficient as possible.
Regardless of the industry, terms like pricing, timing of delivery, intellectual property rights, indemnities, and limits on liability can usually be negotiated. Small businesses may not be able to make many changes to the customer’s template, but they can and should make key changes to protect themselves.
Your customer may also look to you to draft a very important part of the contract – the description of your goods or services. This is where a well-drafted statement of work can give you room to negotiate. You can use this information to make factual arguments about why you shouldn’t take on certain liabilities, or what support you need from the customer to make a project successful.
While contract signing and the kick-off of a relationship is definitely cause for celebration, it is usually very quickly back to business. What kinds of general ongoing legal and compliance issues might a small business be faced with? And how can they be sure to stay on top of these things and make sure that they don't let anything slip through the cracks -- while also concentrating on running the business? Do you have any practical tips, such as setting up a calendar, periodic reviews, etc.?
A small business can expect to give regular updates on their compliance with relevant laws. You might be asked to fill out a detailed questionnaire, or sign an amendment to your contract. Issues vary depending on your industry, but consumer privacy and IT security are usually ongoing concerns.
Many large companies have an “ethical sourcing policy” or “supplier code of conduct” that describe their requirements at a high level. You can usually find these documents on the company website. They’ll give you a sense of the issues that are important to your customer. For example, many manufacturers focus on environmental standards and human rights monitoring in supply chains, while finance companies highlight anti-money-laundering laws. Whatever your large customer’s standards are, you may be called on to show that you’re following them.
Scheduling periodic reviews is a good idea. You can hire a lawyer or consultant to create policies for your company and update them regularly. And innovation is happening in the growing field of regtech, mostly due to SaaS providers who offer software to track small businesses’ compliance activities.
However you approach these obligations, having a dependable program in place can make it easier to manage your contracts and keep your customers happy.
Thank you so much. This has been wonderful. As we are asking all of our Bincubators to do, can you leave us with a few take-away tips for small businesses? Perhaps, since we’ve covered so many different topics, you might simply review some of the key points that we’ve already discussed.
Of course. Here are a few tips to keep in mind during the sales and contract process with a large company:
1. Before targeting large potential customers, think about what you can provide in addition to your goods or services. What problem are you solving for them? At the same time, consider how they’ll help you meet your long-term goals.
2. Due diligence can be a long and detailed process. Be prepared for meetings and follow-ups on everything from IT systems to contract terms.
3.Set up processes that let your company achieve 3 important goals:
· Complying with laws and industry standards.
· Finding, sharing, and analyzing data quickly.
· Delegating everyday customer requests to your team.
This will help you win the business, and set you up for great performance once the contract is signed.
4. Bigger companies will most likely insist on their form of contract. However, some terms – like services, pricing, and even liability – are usually open for at least some discussion.
5. If you run into roadblocks, connect with people who have faced similar challenges. No need to start from scratch when the answer might be out there in your network, or a community like Bincubate!
*This interview is provided for informational purposes only, and is not intended to offer legal/business advice.