Bijan Sabet, one of our investors at Spark (as well as a board member and investor in companies like Tumblr, Twitter, and Bug Labs) has a great blog post today about keeping deals simple. It begins:
At this point I’ve done my share of deals of all sizes and shapes - equity, partnerships, licensing, JVs, etc.
There is one rule I like to follow that I’ve learned the hard way.
Beware of the complicated deal.
There are times that complicated deals can be rather seductive. For example, a big honking deal with a large company can be extremely helpful. But there is almost always a catch.
Bijan’s reminder, “simple is better,” is something I’ve also had to relearn again and again in life the hard way, in partnerships with co-founders, clients, and now, with the many producers Next New Networks works with. The best partnerships I’ve had (including the founder’s agreements of Proteus and Next New Networks) have been the simple ones, based on trust and mutual admiration and a minimum of paperwork, with straightforward terms. And the complicated deals I’ve agreed to have invariably led to headaches — it’s not a question of if it’s going to happen, only when.
We’re currently in the midst of launching a new program at Next New Networks that drastically simplifies the partnerships we have with producers, and moves them towards having standard, openly disclosed terms and clear, consistent rules and expectations. We’ve been testing it here and there with a few people and the results have been incredibly postive, and I’m excited to be showing off some of the new things we have in development as a result at tomorrow’s Digital Content Newfront.
It’s all part of something I’ll need to someday write more about which was a big learning of the last few years — how much better it is to run your business based on what you hope and believe will happen rather than what you fear will happen, which is a cornerstone of keeping deals simple. It’s also what makes some startups, like Tumblr, Boxee and Twitter, great, and I think it’s no coincidence those are all other companies Bijan and Spark have invested in.
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