The biggest deal I ever closed myself was for $6,000,000. It was about 4 months after we founded my first start-up, and I’d never sold in the industry before or closed a deal before of any material size.
It was a confluence of factors:
- First, we already had a brand — and trust. Even though our start-up was new, the customer had been working with us essentially in a pre-pilot for years through a predecessor entity. So the relationship wasn’t new.
- Second, we met all their asks up to that point, 100%. They asked us to do everything from source a larger development partner (to offset risk) to shipping product that proved we could do it. We met all the milestones and asks, even the ones that seemed impossible. No complaints, no issues, we just delivered everything asked of us in the pre-contract phase, in a way that seemed effortless (which it wasn’t, of course). That gave them confidence we’d continue to do so.
- Third, it was the only deal that worked for us. And I was honest & transparent about that. While we had just raised a seed round, the cost to support this customer was so high, and the commitment to the customer was so long (8+ years), that I knew it wasn’t worth either side’s time without a large up-front commitment on both sides. The customer started with a much smaller, and worse deal. I was respectful and polite, but told them I just had to decline. We’d fail them, and probably as a company, if we took too small a deal combined with too high a requirement back.
- Fourth, there were fair outs in the deal. If we didn’t deliver, they didn’t have to pay all of it. The contract, as large as it sounds, wasn’t a rip-off and there was little risk they would truly overpay.
- Finally, they could afford it, and the price was proportionate to competitive vendors. Yes, $6,000,000 in an initial contract sounds high. But it was for a second vendor for a mission-critical product protecting a $20 billion+ market cap. I didn’t at that time understand proportionality in sales. But as long as we delivered the promised value back, $6m was proportionate to what we were doing, and importantly, what they were paying for competitive products.
I did not tell them to take-it-or-leave-it per se. I did tell them, after months of building trust and delivering on earlier commitments (at almost no cost to them) — that this was the only way to make a long-term partnership work.
It took C-level buy-in, but they signed the contract. Relatively quickly.