September 12, 2023 2:39 pm

David Wadler

For early-stage software startups, responding to requests for proposals (RFPs) can seem like a distraction. With limited resources and small teams, you may wonder if it's worth the time and effort to respond. However, winning RFP bids can provide vital revenue, exposure, and credibility during the most fragile period of a startup's lifecycle. In this post, we'll look at why responding to RFPs should be a priority for software startups and provide tips to create compelling proposals. Securing your first major enterprise deals through the RFP process can set your startup on a path to faster growth and success.

The Benefits of Winning RFPs for Startups

Yes, they're painful and sometimes really painful, but responding to RFPs issued by enterprise buyers and public sector organizations can yield game-changing opportunities for startups. Here are some of the key benefits:

  • Revenue - Major RFP wins provide critical early revenue. This capital allows startups to fuel growth while reducing dependency on outside funding.
  • Validation - Being selected validates your solution's value proposition. It's proof your offering solves real problems for customers. Winning RFPs provides confidence in your product-market fit.
  • Credibility - Competing head-to-head with established vendors and winning RFP bids establishes credibility. It shows you can meet the rigorous standards of corporate and government buyers.
  • Exposure - The RFP process helps startups get in front of buyers they may lack connections to otherwise. Even if you don't win, you expand your network and visibility.
  • Feedback - The RFP responses provide startups with valuable feedback on how buyers evaluate solutions. This allows young companies to hone their positioning.
  • References - Winning and delivering on RFPs leads to coveted client references which can be used to win future deals.

Key Parts of a Winning RFP Proposal

While RFP response templates vary, most contain the same core components. Here are the key sections to focus on for software startup proposals:

  • Executive Summary - This overview conveys why you're the ideal fit for the project. Demonstrate deep understanding of their needs and highlight your differentiators.
  • Company Background - Briefly cover who you are, founding story, years in business, core products/technologies, and customer base. Avoid jargon.
  • Technical Approach - Provide details on your solution architecture and how you'll address their specific technical requirements. You can include schematics and diagrams here.
  • Project Management Plan - Highlight your processes for scoping, planning, implementing, and managing the project. Include timelines.
  • Qualifications - Summarize your capabilities and credentials. Provide brief bios of key staff who would work on the project.
  • Pricing - Include detailed breakdown of all costs and fees. Clearly specify what's included.
  • References - List customers of similar size/industry who can vouch for your work. Bonus if they connect to the prospect's values.
  • Terms and Conditions - Note any required legal terms around IP, payments, change orders, etc.

Bear in mind that if you are a software company, your RFP is more likely to be structured as a questionnaire and there might be fewer opportunities for you to be creative. When enterprise buyers issue software RFPs, they are often looking for an "apples-to-apples" comparison between the invited vendors. When responding in this kind of structure, it's extra important to highlight the areas where your offering stands out.

Conducting Due Diligence on RFP Opportunities

With one notable exception that we'll cover at in the tail end of this section, you'll want to vet the opportunity before investing time in responding. Remember, RFP responses typically take tens of hours or more and you want to maximize the chances that this is time well spent. Key questions to ask:

  • Does the project align with your offerings, strengths and target customers? Don't stretch your capabilities too thin.
  • Is the prospect likely to move forward with the project or is this exploratory? Look for signals of budget and urgency.
  • What is the selection criteria? Understanding their decision drivers allows you to tailor the response.
  • Who are the stakeholders involved? Research their needs and pain points.
  • What is the timeline? Carefully consider what you can deliver based on your current workload.
  • Who are the competitors? Analyze their strength and weaknesses compared to your solution.

Conducting due diligence allows you to pursue RFPs strategically aligned with your startup's positioning and bandwidth. While you can't win them all, smart qualification ensures you focus efforts on those most likely to produce results.

Now, here's the exception. Are you using an RFP response automation application Vendorful's AI Assistant? If so, you can certainly lower the threshold to participate. When an RFP with 500+ questions can be answered in a matter of minutes, it probably behooves you to participate. Many of your competitors might be cowed by the size of the RFP and the accompanying demands on their time. In fact, as the number of questions increases, the number of invitees decreases. (Remember, the issuer's time investment corresponds directly with the size of the RFP and the number or participants.) 

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Writing Compelling Executive Summaries and Proposals

The executive summary is your first and sometimes only chance to make an impression. Key tips for an impactful one include:

  • Lead with the customer’s most pressing needs and how you’ll address them.
  • Communicate your value proposition clearly. What makes you uniquely qualified?
  • Establish thought leadership by referencing industry trends and insights.
  • Quantify your experience and results with relevant metrics and achievements.
  • Keep it short, skimmable, and persuasive. Use active, benefit-driven language.
  • Make it visually appealing. Charts, graphs, and ample whitespace engage readers.

The proposal should expand on the summary with details while maintaining a persuasive tone. Recommendations include:

  • Use headings, bullet points, and emphasis judiciously to guide readers.
  • Balance text with figures, charts and diagrams for visual resonance.
  • Check formatting for easy skimming. Avoid dense paragraphs and walls of text.
  • Cite statistics and case studies to strengthen credibility.
  • Answer directly how you'll meet requirements. Leave no question unaddressed.
  • Close with a call to action, request for meeting, or next steps.

Detailing Your Capabilities and Offerings

This section presents the details of your startup’s offerings, methodologies, and credentials. Key elements to cover:

  • Give an overview of your platform, software or solution. Explain key capabilities and architecture.
  • Describe your implementation methodology and project life cycle. Provide timelines.
  • Share case studies and stats demonstrating your experience with similar projects. Quantify results achieved.
  • Elaborate on what makes your technology innovative and why it's the best fit.
  • List out your safety, security and compliance certifications that apply. These build trust.
  • Provide bios of your founders and key team members who would work on the project.
  • State the number of full time employees, contractors, and subject matter experts available.
  • Mention any notable advisors, investors, or partnerships that strengthen credibility.
  • Share examples of existing integrations relevant to their ecosystem.
  • Detail your experience working with clients of a similar size and industry.

The goal is to instill confidence you have the track record, resources and personnel to deliver on expectations. Avoid exaggerations and be transparent about limitations. Bear in mind that if you have been invited, the buyer knows that your company is a startup. They are therefore likely aware of some of your limitations but value some of the attributes that many startups possess e.g. innovation, moving quickly, differentiated pricing models, etc.

Providing Cost Breakdowns and Quotes

RFPs invariably request detailed cost breakdowns. Be transparent and specific when providing:

  • List all fees with clear definitions (hourly rates, licensing, implementation, training etc.)
  • Break out costs by milestone, project phase, or deliverable.
  • Specify any one-time vs recurring costs.
  • Note discounts, incentives, or bundled pricing you can offer.
  • Explain pricing models - per user, tiered, etc. and provide rates.
  • Disclose all assumptions your pricing is based on.
  • Compare your costs to competitors or industry benchmarks if advantageous.
  • Specify any complimentary services, extras, or free trials you can include.
  • Provide options for customizations or add-ons they may request.
  • Outline payment terms and billing frequency.

While startups may offer discounts to win business, avoid going too low. Consider the total lifetime value of gaining this customer.

Following Up After Proposal Submission

After submitting the proposal, your work isn't done. Key follow up steps include:

  • Thank the prospect for the opportunity to respond. Offer to provide references or additional materials.
  • Inquire about the timeline for decision making and next steps.
  • Ask if they need any clarification or have additional questions. Make yourself available.
  • Request a meeting to do a deeper dive into your proposal. Aim to establish rapport.
  • Provide new case studies, content, or updates that reinforce your value.
  • Periodically check in if you haven't heard back after the specified date. Be helpful not pushy.
  • When you win, confirm next steps and timeline. Offer any help to get started.
  • If you lose, request feedback on your proposal. Learn and improve for the next opportunity.

Following up strengthens your candidacy, builds relationships, and garners insights to improve future RFP responses.


In summary, early-stage software startups can gain transformative opportunities by strategically responding to RFPs. The competitive bidding process allows emerging innovators to validate their solutions, gain credentials, and secure enterprise and public sector deals. This provides startups with the revenue, references, credibility, and exposure needed to accelerate growth. By focusing proposals on addressing the prospect's needs, differentiating capabilities, quantifiable track records, and clear costs, startups can craft compelling bids. Responding to RFPs enables startups to evolve from promising upstarts into mature market leaders. Rather than avoiding RFPs, savvy startups should embrace them as a launching pad for success.

About the Author

David Wadler is a co-founder and Chief Revenue Officer at Vendorful. Prior to Vendorful, he was the General Manager for Rich Media & Cloud at Lexmark Enterprise Software, where he was responsible for strategic direction of Lexmark’s initiatives as they related to rich media and cloud products. He came to Lexmark in 2013 with the acquisition of Twistage, where he was a co-founder and CEO. Prior to Twistage, he worked in a variety of industries and roles while trying to figure out what he was supposed to do with himself. David is a holder of a degree in economics from Brown University and is a resident of New York City.

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