[prirun]

> The are very well aware of the fact that I am probably not able to handle this alone and let me know that they know the value of what would need to be done. The also acknowledged that the current pricing plan won't work for them and essentially they are willing to pay $$$$$$

IMO, if they want your product this much, they should have no problem paying you up front, at least enough to hire help. I'd only hire help on a contract / temporary basis, because this whole deal could blow up in your face at any time, and because they are much larger than you, you can't do anything about it, even if you have a contract.

I wouldn't release source; too easy to steal and you have no leverage.

What I have often done with large customers (Ford, IBM, others) is to charge an hourly rate to help develop a project plan, including milestones with dates and payments you both agree on as well as acceptance criteria for each milestone. As you meet milestones, they pay you. That way if they decide to back out, you have at least been paid for the work that's been done.

Also make it clear in the contract that any work you do remains yours and they don't own anything.

Good luck!

A short PS: I have had billion dollar companies try to screw me over more than once, so plan for that possibility. Sometimes you can take a hard line - "Yes, you will honor our contract through blah, blah, blah. You can cancel it after that but not before." - and sometimes that works (it did for me once) and sometimes they just ignore you. Going after them legally is almost never practical, so don't think just because you have a contract, you are protected. Make your milestones short, like a month or two - no longer.

No, Ford and IBM never screwed me over. They were both great to work with.

[singleauroa]

Thank you so much for the great insight! Good advice as well with the only hire on a contract basis. Thought of that as well. Yea it did sound like they would pay me upfront.

I just don't have any idea what the condition of the contract will be and where I have to be very cautious... The source code thing is great advice.

The charging on an hourly rate sounds interesting and new to me.

Also, this is not the first time I have read that multi-b companies screw over small rising startups. Sounds horrible but as you said – nothing to do about it.

[prirun]

I read their contract carefully but didn't have a lawyer review it. My experience with lawyers is that most are expensive but not that great. I've had one really good lawyer out of 5-6 that were pretty sloppy with details, like putting together corporate formation papers with some other customer's personal info.

You can negotiate terms that are important to you on a contract. Start with the most important changes you want to make, because at some point they may get impatient and just say "Okay, now we need you to sign this", because they will get sick of having to deal with their own legal department.

For example, there was a clause in my contract about indemnifying them. Guess what - I was not in a position to indemnify IBM if Ford decides to sue them because of my work. So yeah, stuff like that I had struck from the contract. If they had said I had to agree to it, I probably would have stuck to my guns and said no, because it was so absurd. Another option would be to get umbrella insurance, but I was too dumb to know that then (I was 29).

I think a key thing is that you understand the contract. If you don't understand something, ask them and/or do some research or hire some legal help until you are comfortable with it. At some point, you either trust them or don't, because in the end, they have all the money and power and you are at their mercy. Keep that in mind.

[DoreenMichele]

A short PS: I have had billion dollar companies try to screw me over more than once

From what I have read, this is more the norm than the exception. Small businesses routinely think they have it made in the shade and have won the small business lottery because some big company is interested in them. In reality, it's often much more like "You my bitch."

This is not advice. It's just an observation.

[codyguy]

Hi, How did you manage to get them to pay you hourly to create a project plan? What did you propose? I also need to do this for my venture but never clicks. Please share some advice. Thank you.

[prirun]

I had done work at Ford and when a project came up there with IBM involved, Ford recommended me to them. Since it was my first contract with IBM, they didn't know anything about me and hired a project manager as a liason. I had already submitted an overall bid for the project, and since it would take more than 6 months, they wanted to do it with milestones so that I actually got some money along the way and they could see that I was capable of doing the work. And, I think they were actually looking out for me, because they knew that someone up the corporate ladder could change their mind and the whole project might get scrapped, they could get someone else to do it, etc.

A detailed project plan is something that both sides have to agree on. The project manager gave me guidance on IBM's expectations but it was up to me to define the "Statement of Work" and I defined the milestones so that there was one every month or two. It was their idea to do this part on an hourly basis. For one thing, the group that was putting my contract together didn't have it ready, so the only way I could work was hourly. A project plan was their requirement, not mine.

Doing a project plan for a fixed cost is doable too. The bottom line is, don't work for free unless you want to. If they want a project plan for a big project but won't pay for your time to put it together, that would be a huge red flag for me and I'd probably pass. If you are the one that requires the project plan, that's a little different and I could see where a customer might balk on paying for that.

[codyguy]

Thank you for sharing the details.