A promising SaaS startup, focused on building analytics tools for enterprise customers, faced a sudden roadblock when a major potential client flagged issues in the company’s data processing agreement (DPA).
The problem
The DPA was critical to closing the deal, as the prospective client was concerned about compliance with the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA). The startup’s founder, while adept at navigating the technical and operational aspects of the business, lacked the legal expertise to address the situation quickly. This was especially pressing as delays in finalizing the deal risked both revenue and the company’s reputation in the industry.
The Solution
Our law firm was engaged to address the issue and ensure the startup was equipped to manage similar challenges in the future. With an experienced team specializing in tech-sector privacy compliance, we reviewed the flagged DPA within 24 hours. The problem stemmed from ambiguous language regarding the startup’s role as a data processor versus a data controller and the absence of necessary clauses addressing subprocessor obligations and cross-border data transfers. Such omissions are common for early-stage startups that may have limited legal resources or rely on templates not tailored to their operations. Recognizing the urgency, we streamlined the DPA to include provisions explicitly addressing the client’s concerns, including safeguards for international data transfers using Standard Contractual Clauses (SCCs), detailed subprocessors lists, and mechanisms for data breach notifications.
This case study demonstrates how we helped resolve complex data privacy issues efficiently, enabling the startup to close an important enterprise deal while strengthening their compliance framework for future growth.
In parallel, we advised the founder on creating a more robust compliance framework that would preemptively address these issues for future clients. This included drafting a comprehensive DPA template that could be customized for different jurisdictions, as well as revising the startup’s public-facing privacy policy to ensure alignment with GDPR and CCPA requirements. Additionally, we conducted a high-level review of the startup’s data flow practices to identify any potential compliance risks that could be flagged in subsequent negotiations. This review uncovered a minor gap in their cookie management system, which we resolved by recommending a third-party tool that enabled automatic consent tracking and documentation.
Conclusion
The results were immediate and impactful. The startup successfully closed the deal with their enterprise client within a week of our intervention, securing a critical revenue stream and bolstering their credibility in the industry. Moreover, the founder expressed confidence in their ability to handle similar situations in the future, thanks to the proactive measures we implemented. This case highlighted how working with experienced outside counsel can not only resolve pressing legal issues but also position startups for sustainable growth by establishing frameworks that reduce future legal risks and inefficiencies.