For SaaS companies, the customer agreement is critical. Why? A SaaS relationship is not a 1-time purchase of software to be installed. The SaaS customer agreement is a document which will govern (what you hope will be) a long-term relationship with your client. It must cover the software license aspect of the relationship, the ongoing maintenance, upgrading and use of the software and - often overlooked - the professional services to be provided by the SaaS company to the client. The standard software license agreement is simply not sufficient. And please do all you can to talk your REALLY BIG client from insisting that you use a form purchase agreement.
I recommend a "Subscription Agreement" for the use of the software. This makes it clear what you are providing to the client - not a license to use software but access to a service during the subscription period. The SaaS client must also consider the relationship professional services play and the nature of the SaaS service being provided. Each will require customization of your SaaS customer agreement.
SaaS legal consulting requires a novel approach to client agreements. Knowledge of ASP law, SaaS litigation issues, cloud computing law, etc. is just a start. Make sure you discuss the unique nature of your SaaS service with a experienced SaaS law counsel so that you put the best agreement possible in front of your clients.
Posted Monday, January 4, 2010 by
Janet Croswell
Alerding Castor Hewitt, LLP is proud to announce the addition of Indiana technology lawyer Bill Boncosky to the firm. The former General Counsel for ExactTarget, Bill has tremendous experience as technology counsel for one of the most successful technology start ups based right here in the heart of Indianapolis. A company that had just over a dozen employees when he joined, Bill has substantial experience in licensing agreement negotiations, ASP Law and Cloud Computing Law serving in that role for over seven years. He will be able to provide significant guidance based on solid experiences to many of our clients operating within this industry.
If you're looking for SaaS legal consulting, the attorneys at Alerding Castor Hewitt, LLP can help. The newest attorney to join the firm, Bill Boncosky, is no exception.
Posted Friday, November 20, 2009 by
Chris Stephen
As an admitted technophile, I can't help but look into all the newest gizmos and gadgets. Plus, working at an information technology law firm, I can even bill it sometimes. Thus, I've recently begun a fascination with e-books. Jason Wilson has done a very interesting set of blogs looking at the use of e-books (or lack of use) for lawyers (www.jasnwilsn.com/). Jason's viewpoint is as a counterpoint to a recent set of blogs by Professor Eugene Volokh (volokh.com/2009/10/02/the-future-of-books-related-to-the-law/). I find this debate interesting for lawyers in general, but litigators specifically.
While I appreciate Jason's point of the importance of cloud computing and web based interfaces for lawyers, I have to admit that I personally think that e-readers are likely to have increasing presence in courtrooms around the country. I am genuinely intrigued by the thought of turning to my e-reader to "leaf" through a treatise on privacy litigation or ASP law that I've downloaded while sitting in a courtroom. This is particularly true when the courtroom that I'm sitting in is located in small town Indiana (or any other small town) that is still working on integrated computer systems and look at you askew when you ask about WI-fi. Web based interfaces are extremely important to the 21st century attorney, but there are still limitations. And if technology can allow me to carry treatises and law books that I might need before a court while still using my super sleek briefcase, I'm all for it.
While I appreciate Jason's point of the importance of cloud computing and web based interfaces for lawyers, I have to admit that I personally think that e-readers are likely to have increasing presence in courtrooms around the country. I am genuinely intrigued by the thought of turning to my e-reader to "leaf" through a treatise on privacy litigation or ASP law that I've downloaded while sitting in a courtroom. This is particularly true when the courtroom that I'm sitting in is located in small town Indiana (or any other small town) that is still working on integrated computer systems and look at you askew when you ask about WI-fi. Web based interfaces are extremely important to the 21st century attorney, but there are still limitations. And if technology can allow me to carry treatises and law books that I might need before a court while still using my super sleek briefcase, I'm all for it.
Posted Wednesday, October 21, 2009 by
David Castor
I am speaking this afternoon at the MBO Conference on the Legal Landscape of Corporate Blogging. It was an honor to be invited to participate in this year's conference, and I am truly looking forward to the time.As an Indiana technology lawyer I monitor areas of law that impact my clients' business worlds. My colleagues and I monitor Internet laws, privacy laws, ASP law, SaaS law, cloud computing law, and various other areas of business law to best advise our clients on how to navigate the legal landscape of emerging technology fields. Blogging law is the topic for today's talk.
We will be covering areas such as copyright infringement, defamation claims, privacy laws and Section 230 protections. We will also address the recent FTC Guidelines on endorsements by bloggers.
This should be an interesting discussion.
Posted Thursday, September 17, 2009 by
David Castor
I read an interesting post yesterday on Small Business Trends by Professor Scott Shane, Professor of Entrepreneurial Studies at Case Western Reserve University. It is a good read for current entrepreneurs and those daring to dream of starting their own company. Here is the post:
Most entrepreneurs believe a bunch of myths about financing new companies that hinder their efforts to raise money. Here are a few:
Myth 1: It takes a lot of money to finance a new business. Not true. The typical start-up only requires about $25,000 to get going. The successful entrepreneurs who don’t believe the myth design their businesses to work with little cash. They borrow instead of paying for things. They rent instead of buy. And they turn fixed costs into variable costs by, say, paying people commissions instead of salaries.
Myth 2: Venture capitalists are a good place to go for start-up money. Not unless you start a computer or biotech company. Computer hardware and software, semiconductors, communication, and biotechnology account for 81 percent of all venture capital dollars, and 72 percent of the companies that got VC money over the past 15 or so years. VCs only fund about 3,000 companies per year and only about one quarter of those companies are in the seed or start-up stage. In fact, the odds that a start-up company will get VC money are about 1 in 4,000. That’s worse than the odds that you will die from a fall in the shower.
Myth 3: Most business angels are rich. If rich means being an accredited investor — a person with a net worth of more than $1 million or an annual income of $200,000 per year if single and $300,000 if married — then the answer is “no”. Almost three quarters of the people who provide capital to fund the start-ups of other people who are not friends, neighbors, co-workers, or family don’t meet SEC accreditation requirements. In fact, 32 percent have a household income of $40,000 per year or less and 17 percent have a negative net worth.
Myth 4: Start-ups can’t be financed with debt. Actually, debt is more common than equity. According to the Federal Reserve’s Survey of Small Business Finances, 53 percent of the financing of companies that are two years old or younger comes from debt and only 47 percent comes from equity. So a lot of entrepreneurs out there are using debt rather than equity to fund their companies.
Myth 5: Banks don’t lend money to start-ups. This is another myth. Again, the Federal Reserve data shows that banks account for 16 percent of all the financing provided to companies that are two years old or younger. While 16 percent might not seem that high, it is 3 percent higher than the amount of money provided by the next highest source — trade creditors — and is higher than a bunch of other sources that everyone talks about going to: friends and family, business angels, venture capitalists, strategic investors, and government agencies.
As a business law, SaaS law/ASP law and private equity attorney, I see early stage technology business owners encounter these myths regularly. When looking at developing an early stage technology business, key is to consider market opportunity and your ability to meet the opportunity based on your constraints (including capital constraints and founding team abilities).
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Alerding Castor Hewitt, LLP is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business and Internet litigation.
