Contracts
In my prior post, I discussed Letters of Intent and how they’re used in the early stage startup context, with the caveat that they’re also used in major commercial contracts and transactions such as joint development, acquisitions and financings, and tailored accordingly. Today, I discuss another contract that’s helpful to understand in the early stage context, but that is also useful when the company is farther along.
Design Partner Agreements are agreements between early or potential customers with a tech company, where the company gives the customers free or heavily discounted access to their product in exchange for providing feedback that the company then owns and can incorporate into their product roadmap. These agreements are often entered into in the early stages of a startup’s life cycle when they are developing their first prototype and need direction via feedback from customers to understand product features that make the most impact on the user experience and to vet market demand.
However, these agreements can also be useful when a company (at whatever size) is launching a new product and is also looking to understand market demand and whether their product direction is serving their target customer. Usually, a company will create a design partner program, reach out to existing or prospective customers, and curate a pool of customers for the program where they partner together for product development.
Some typical provisions to expect are:
Other typical provisions you often see in customer agreements are included here as well, such as confidentiality, IP infringement indemnity, disclaimer of warranties, and others. If you’re considering launching a design partner program agreement, it’s a good idea to speak to a commercial attorney to properly draft a Design Partner Agreement to cover your program specifics and ensure it fits into your existing contract ecosystem (Order Form, Terms and Conditions, etc.)
