“Sorry, this just isn’t a good fit for us right now.”
This simple but terrifying sentence is a recurring nightmare for founders trying to close deals with corporate partners. And it’s even worse when you’ve been working on a deal for months and were banking the fortunes of your company on its success. So when you’re rejected, is it all over or is there something you can do to turn things around?
Here are some tangible next steps to take when your corporate partner says no to a deal:
Get Feedback
More often than not, your corporate counterpart will be willing to give you feedback on why the deal didn’t get done. Without hearing why you got rejected, it’s easy to make up a narrative for what happened. This will lead you and your team to engage in a meaningless debate about what needs to be improved to ensure you can close similar deals in the future. Rather than falling into this trap, the best thing to do is just ask for feedback about what happened. Sometimes you’ll find the reason was something not even related to your offering.
One other thing to note here is that the stated rejection reason might not be the true reason your deal didn’t get done. For example, your counterpart may tell you that there are several other competing deals which they need to prioritize and that their team just doesn’t have the bandwidth right now to push your deal through. While this might technically be true, it tells you that the real reason the deal didn’t get completed is that what you’re offering just isn’t a top priority right now.
Continue to Send Updates
Striking a balance for the advice I’m about to give can be tricky but if you do this correctly, it can be possible to resurrect deals that seem dead. If a potential corporate partner says no (for any reason), you can still continue to stay in touch with your counterpart and send updates on the state of your business. In particular, sending updates regarding milestones or objections that your counterpart was concerned about is crucial.
An important caveat here is that sometimes, you won’t hear an outright “no” from potential corporate partners. It’s similar to venture capitalists – there just isn’t much to be gained by outright rejected someone. Instead, corporate innovators and venture capitalists both have an incentive to keep you in their orbit…just in case you end up becoming the “next hot thing”.
Change Your Ask
Usually, I wouldn’t recommend altering your ask once you’re in the negotiation process but with several clients, I’ve noticed that the deal being discussed is just…too extensive. If you make a huge ask of a potential partner the first time you’re working with them, it’s possible that you’re sabotaging yourself.
If you’re running into trouble closing, you can consider a smaller ask. For example instead of pushing for an annual contract, is there something smaller, such as a paid pilot you can propose? Or a contract term where a lack of results in a specified period of time would allow your partner to execute an out clause from the deal? This is all about making it impossible for your counterpart to say no to your proposed deal.
One other thing to note: a “huge ask” can mean different things to different companies. With some partners, it’s all about the financial cost. With others, it’s more about disruptions to existing processes. This varies from partner to partner and is something you’ll need to keep in mind as you structure the deal.
Find Other Partners
Unless you’re in a strange, hyper specialized market, odds are that there are several large companies in your space. While one of these companies may seem just perfect to work with, there’s a strong chance that you’re romanticizing them. Just because a deal didn’t work out with one of the large companies in your industry, that doesn’t mean you can’t make a deal with one of their competitors.
To avoid this myopic focus on a single partner, it is best to have an ongoing dialogue with a minimum of two (but ideally several) potential partners. Since corporate deals take time, this prospecting needs to begin early.
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These tactics can help resurrect deals that appear dead. As much as it sucks to get rejected by a partner you’ve been courting for months (or longer), in the context of startup-corporate deals, “no” is not always final. Further details about these tactics (and much more) are available in my book The Startup Gold Mine: How to Tap the Hidden Innovation Agendas of Large Companies to Fund and Grow Your Business.
If you’ve used these or other tactics to successfully resurrect lost deals, I’d love to hear from you.