Fintech space is one of the best spaces I have worked in.

Mainly because of the life-changing opportunities people can have.

And if you end up creating a good product, you are bound to win with good distribution.

But how do you do that?

Normally, people look for distributors.

Partners who have access to a certain market and end customers.

So normally it goes like this:

-> Startup creates a good product

-> Distributors distribute it

And then they profit off.

One of our recent clients was in this phase too.

They created payment software and wanted to distribute it through channels.

But before they could do that, there were 3 challenges we could identify.

(1) The startup needed to protect its proprietary software and prevent unauthorized use or distribution.

And without proper protections, there was a risk of intellectual property theft or misuse by distributors.

(2) The startup had to have clear terms in the agreement.

To outline the rights and responsibilities of both the startup and the distributors.

Vague terms always lead to misunderstandings and conflicts, and then end up killing the distribution strategy.

(3) The startup also needed a structured approach to manage revenue sharing, payments, and financial reporting.

Making sure they get paid on time, and that the payments were accurate from distributors.

Because this was important to maintain cash flow and become financially stable.

This time the work was a lot.

So we took 4 steps to ensure everything was done right.

(1) Intellectual Property Protection:

The first step was to draft clauses that clearly defined the ownership of the software and all related intellectual property rights.

We also included provisions to restrict the use, modification, and sublicensing of the software by distributors without prior consent.

This is to help keep their IP safe.

(2) Clear Distribution Terms:

The next step was to outline the scope of the distribution rights, including the geographical territories and specific markets the distributors could target.

We also detailed the responsibilities of both parties, such as marketing efforts, customer support, and compliance with local regulations.

This way, everyone knew what they were doing.

(3) Revenue Sharing and Payment Terms:

We added a transparent revenue-sharing model, specifying the percentages or amounts due to each party from sales.

We also added detailed payment schedules, invoicing procedures, and requirements for financial reporting to make sure there were timely and accurate payments.

We also had to add clauses for auditing rights, allowing the startup to verify the accuracy of financial reports and payments.

You can't just trust everything blindly.

(4) Performance Metrics and Termination Clauses:

We set up performance metrics and sales targets for distributors to ensure they actively promoted the software.

We also included termination clauses outlining the conditions under which the agreement could be ended, protecting the startup from underperforming or non-compliant distributors.

This way, the startup had a way out of the project.

Now with the help of these steps, our client had 3 things going for him.

1) His startup IP was protected and secured

2) He had clarity over where the software was to be distributed

3) He knew his payments were protected, and in case there was some funny business, he had a way out of that agreement

All these points were important to ultimately make sure our client could properly engage with the distributor.

And actually get the full help of the other party.

If you are also in the middle of creating your own payment software.

Or if you work in the fintech space and just going through the distributors list.

Then you will always require an agreement with them.

Lucky for you, I have a few spots free to help you out!

If you want in, just reply to this email with "I AM IN" and I will tell you how we can work together!

See you soon.

-- Akhil Mishra