पाठशाला Pathshala · ग्राहक Grāhak, The customer · Lesson 17 · Build
Selling to Indian enterprises: procurement, pilots and patience
A large Indian company buys through a champion, a paid pilot, a procurement desk and ninety-day terms. Map the path, find the person who can sign and size the wait before it sizes you.
Pathshala, The Founder Library · 11 October 2026 · 6 min read
A meeting with a large Indian company feels like a win. The person across the table likes the product, mentions a budget and asks for a pilot. Ten months later the founder is still waiting for a purchase order, and the person who liked the product has moved to another department.
This lesson maps the path from first meeting to cash: the shape of the deal, how to run a pilot that converts, what procurement asks for, the payment protections the law gives a small supplier, the time it all takes and the person who can actually sign. It ends with the weekly review that keeps a handful of such deals moving.
The shape of an enterprise deal in India
At least six roles touch the deal, and the founder usually meets one. The champion found you and wants the problem solved. The users will live with the product. The economic buyer controls the budget. IT and information security will send a questionnaire about data, hosting and access. Legal will mark up the contract. Procurement and finance will create a vendor code, compare quotes and decide when you are paid. The [lesson on who pays, uses and decides](/library/who-pays-who-uses-who-decides) shows how to map them; in an Indian enterprise expect the map to include a committee.
Each role can stop the deal and only one or two can start it. That asymmetry is the reason enterprise sales takes patience, and the reason the founder must know every name on the map by the end of the pilot, not the start of procurement.
The pilot: paid, short and written down
A free pilot is the most common way Indian startups lose a year. The customer has nothing at stake, so nobody senior attends the review, the success criteria are discovered at the end and the decision is deferred to the next budget cycle. Steli Efti’s advice in a Stripe Atlas AMA is blunt: you want paid pilots, even if the product is buggy or unfinished, because in the enterprise world a product without a price tag is not valued and a free pilot draws pleasant, misleading feedback. He suggests treating the payment as refundable and not counting it as revenue until the customer has stayed six months and is happy.
Write a one-page pilot agreement before anything is installed. The problem and the metric: for example, claims documents processed per analyst per day. The baseline, measured in the first week. The target that counts as success. The length: six to ten weeks; a pilot that runs past a quarter has become free consulting. The fee, and whether it is credited against the first year. The decision: who will decide, on what date and what happens if the target is met. Ask the economic buyer, not the champion, to sign it. If nobody will sign, you have learnt something important about the deal.
Procurement is a process, not a person
Once the pilot succeeds, the deal leaves the champion’s hands. Procurement will want a vendor registration pack, and a founder who assembles it on request adds weeks. Prepare it once: certificate of incorporation, PAN, GST registration certificate, a cancelled cheque or bank letter, the Udyam certificate, a signed non-disclosure agreement, the company’s standard terms, a filled information-security questionnaire and a list of current customers who will take a reference call.
Expect three habits. Comparison: many enterprises need three quotes or a reverse auction for anything above a threshold, even when the champion has already chosen you; ask early what the threshold is. Rate contracts: a deal may be signed as a rate card and purchase orders raised against it, so the contract is not the cash. Calendar: budgets are set before the financial year starts on 1 April, and a purchase that misses the plan often waits for the next one.
Government and public-sector buyers add their own route and some help. Startup India summarises the relaxations for DPIIT-recognised startups under the General Financial Rules, 2017: exemption from prior experience and prior turnover criteria under rule 173(i) and from the earnest money deposit under rule 170(i). These apply to central ministries, departments and their public-sector enterprises; states may follow different rules. The Government e-Marketplace, GeM, runs a Startup Runway for startups to reach government buyers. Checked October 2026.
Payment terms, and the law on your side
Large Indian companies often propose sixty, ninety or more days. If your company is registered as a micro or small enterprise on Udyam, which is free and needs only an Aadhaar number, the MSMED Act limits that. A buyer must pay a micro or small supplier within forty-five days of accepting the goods or services; after that it owes compound interest at three times the bank rate notified by the Reserve Bank, and the supplier can file a claim on the MSME Samadhaan portal for the state facilitation council to decide.
The tax law adds pressure from the buyer’s side. Under section 43B(h) of the Income-tax Act, carried into the 2025 Act as section 37(2)(g), a buyer can deduct an amount owed to a micro or small enterprise beyond the MSMED limit only in the year it is actually paid. Finance teams know this. Put the Udyam number on every invoice and in the vendor form, and say in the contract that payment terms follow the Act. Most enterprises will not argue.
How long the money takes
Add the stages and the result is sobering. Set the sliders to your own deal; the defaults are a plausible private-sector sale from a Bengaluru software company to a Mumbai financial services firm.
Eight weeks to start a pilot, eight weeks of pilot, ten of procurement and ninety-day terms put the first rupee about nine months after the first meeting. At ₹25 lakh a month of burn, the company spends over ₹2 crore while waiting for a contract worth ₹40 lakh a year. That is not an argument against enterprise customers; their renewals and expansion can be worth many times the first year. It is an argument for running several deals at once, for the pilot fee, for asking for part of the first year in advance and for knowing the [runway](/library/runway-how-many-months-you-really-have) the wait consumes. Shorten the slider you control. Payment terms you can sometimes move with the MSMED Act; pilot length you can always move with a written agreement.
The champion opens the door. The person with the authority to sign decides whether you walk through it, and the founder’s job is to meet them before procurement does.
The champion who can actually sign
Every large company has a delegation of financial powers: a written schedule of who may approve spending of what size. In a typical schedule a general manager may approve ₹10 lakh and a vice-president ₹50 lakh, while anything larger needs the chief financial officer or a committee; the numbers differ in every company, which is why you ask. Ask the champion, in the first month, three questions. Who approves a purchase of this size? Has that person approved something similar before? What would they need to see? Then ask to meet them, with the champion, before the pilot starts.
Watch for the signs of a champion without power: they cannot name the approver, they want the pilot free, they say budget will be found later, or every meeting includes only their own team. None of these kills a deal, but each one means the founder must find a second champion higher up. Keep two relationships alive in every account; people in Indian enterprises move departments often, and a deal held by one person leaves with them.
The weekly deal review
Thirty minutes every week for each enterprise deal above your threshold. Stage and date: which of the four stages it is in, and when it entered. The signer: named, met or not yet met. The pilot agreement: signed, with the decision date. Procurement pack: sent, and the vendor code issued or not. Invoice and due date once the purchase order arrives, with the forty-five-day date beside it. Next action, with an owner and a date.
Once a month, add the cash clock for every live deal and compare the total expected cash by quarter with the runway. If the cash arrives after the runway ends, raise, cut burn or find faster customers now, not when the purchase order is late.
Nothing here is legal, tax or investment advice. The procurement and payment rules described were checked in October 2026; confirm the current position before relying on them in a contract.
Sources
- Steli Efti, AMA with Stripe Atlas (paid pilots, refundable fees, revenue only after six months)
- Startup India, Public procurement for startups (GFR 2017 rules 170(i) and 173(i); GeM Startup Runway) — Exemption from prior experience, prior turnover and EMD for DPIIT-recognised startups; central government buyers only. Checked October 2026.
- Ministry of MSME, MSME Samadhaan: delayed payment monitoring system (MSMED Act, 2006, sections 15–24) — Payment within 45 days of acceptance; compound interest at three times the RBI bank rate.
- TaxGuru, Finance Ministry clarifies section 43B(h) 45-day MSME payment rule (Rajya Sabha reply, 21 July 2026) — Corresponds to section 37(2)(g) of the Income-tax Act, 2025.
- Ministry of MSME, Udyam Registration portal — Registration is free and needs only an Aadhaar number.