Contract rules

We are transparent about how we contract with customers, including what discounts are available. It's better for them, and better for us. We are allergic to the phrase 'let me talk to my manager and see what we can do' - we follow a principled approach.

Discounts

We don't offer discounts to customers paying monthly, irrespective of commitment.

Although our standard monthly pricing has volume discounts built in, it's common practice when negotiating software contracts for the customer (and their procurement team) to ask for a discount. We follow the 4 discount levers framework, being transparent about what drives our discounting:

The 4 discount levers & why they matter to us

Our general principle is that discounts are earned, not given. Each lever represents real benefit to both parties:

1. Volume: The amount of credits purchased - Larger deals have economies of scale. Our cost to serve a $500k customer is not 10x a $50k customer, so we can share those savings
2. Timing of Cash: When we receive payment - Money today is worth more than money tomorrow. Cash in hand lets us invest in product, hire engineers, and grow the business faster
3. Length of Commitment: Contract duration - Longer commitments reduce our customer acquisition costs. We spend less on people doing renewals and can invest more in product development
4. Ability to Forecast: Mutual agreement to timing - When both parties commit to specific dates (contract close, renewal timing), it helps us plan resources and helps customers secure budget

Every discount reflects a value exchange that provides a sound basis for our pricing. We don't offer unilateral concessions - better pricing comes from moving on one or more of these levers. This framework gives both sides a clear frame of reference for what drives pricing decisions.

How our discounts work

In our consumption-based pricing model, the first way for a customer to reduce spend is to ensure that they are only sending data to us which is valuable to them. There is different guidance here depending on which product(s) they are looking at.

Beyond optimization, we offer discounts based on four levers:

1. Volume discount (based on credit purchase amount per contract year - Customers must qualify for this discount before receiving discounts 2 through 4)

• $25-59k: 20% base discount
• $60-99k: 25% base discount
• $100-249k: 30% base discount
• $250-499k: 35% base discount
• $500-999k: 40% base discount
• $1M+: Contact us for custom pricing

Two things to be clear on when working out which tier applies:

- It's credit value, not cash. The tier is set by the amount of credit the customer receives (the pre-discount, list-price value), not the amount they pay us after discounts.

- It's per contract year, not per term. On a multi-year deal, use the credit allocated for a single contract year. A 2-year deal with $250k of credit a year sits in the $250-499k tier at 35%, not the $500-999k tier at 40% — the reward for the longer term is the length of commitment and timing of cash levers below, not a bigger volume tier.

2. Length of commitment discount (additive)

• 1-year commitment: No additional discount
• 2-year commitment: +3% additional discount
• 3-year commitment: +5% additional discount (doesn't stack)
• 4-years or more: Contact us for custom pricing

Note: This discount lever does not apply to additional credit purchases made within the first half of the term and applies only to the initial order form's credit purchase.

3. Timing of cash discount (additive)

• Net 30 (our standard): No additional discount
• Multi-year deals: +2.5% per additional year paid upfront (i.e. +2.5% for 2 years, +5% for 3 years)
• Extended payment terms: -2.5% for every 15 days beyond Net 30 (e.g., Net 60 = -5% from total discount)

Note: We require upfront payment for all discounted contracts. Quarterly or split payment terms are not available as they impact our cash flow and add administrative overhead. If the full projected amount exceeds budget, customers can purchase fewer credits upfront at the corresponding discount tier and then add more later.

4. Ability to forecast - mutual commitment to timing (additive)

For monthly-to-annual conversions & net new agreements: +5% additional, non-recurring discount

• Available when both parties commit to specific, mutually agreed date for contract signature (this is not an end-of-quarter discount)
• To include the 5% discount on the order form, we require written confirmation by the customer's designated signatory of the customer's intent to sign an order form by a specific, mutually agreed upon date - _this needs to come from the person who will actually sign the order form_
• This is about creating predictability for both sides, not artificial deadlines
• This is a one-time discount, which will be offered once during a monthly-to-annual conversion or net new agreement cycle

For renewals: +5% additional discount

• Early renewal commitment (60+ days before expiration)
• Customer must be actively on a prepaid credit plan at the time of signing. If credits ran out before a new order form is signed and the customer rolled onto pay-as-you-go, the +5% does not apply; this is treated as a re-entry into a credit plan, not an early renewal. The spirit of this discount is to reward customers committing to a new renewal plan earlier than required, often because of recent rapid growth or a planned increase in usage, both of which result in a deeper partnership.

If timelines change: We will handle these on a case by case basis, but the default is to withdraw the additional discount if the customer does not sign an order form by the time that was originally agreed.

You shouldn't offer discounts above the levels outlined here. If you go outside of these rules without clearing it with Ben Bradley (TAEs or TAMs) or Simon Fisher (CSMs), you should assume by default that the deal will not count toward your quota.

Why we require up-front payment for credit purchases

We've found that split payment terms create friction for both teams – customers chasing internal approvals, us chasing invoices, nobody focused on delivering value. When customers pay quarterly or monthly, they often consume credits faster than they pay for them, effectively turning us into a line of credit. We are vendors, not lenders. Our focus is on building the best product, not managing accounts receivable. Up-front payments keep everyone focused on customer success and let us invest cash immediately into building features and support. If a customer needs payment flexibility, we're happy to adjust the credit amount and discount, per guidelines above, to fit their budget while maintaining up-front payment.

Credit for case studies

We don't offer additional discounts in exchange for a case study, as paying for case studies can devalue them. We should be working to get our customers to a state of happiness such that they are willing to tell everyone how great PostHog is without needing to pay for it.

Self-serve discounts

We also offer a way for customers to receive discounts on their usage without talking to sales or being on an Enterprise plan. In PostHog, if a customer meets certain criteria, they will see a banner on their billing page with a call-to-action (CTA) to "buy credits". The form they fill out will be auto-populated with an estimated number of credits based on their last 3 months of usage, but they can adjust this value as needed. They will have the option to pay with the card on file or to receive an invoice. Credits will be applied to their account once the invoice is paid.

Requirements for self-serve discounts:

• 3 or more paid invoices
• Average of $280 or more across the last three invoices
• No open invoices
• Not currently on the up plan, a legacy plan, or having existing credits

Additional notes on self-serve discounts:

• For credit purchases below $25,000, the discount is 10% off. Credit purchases of $25,000 and above follow the standard volume discount structure above.
• Instead of providing all credits upfront, we apply 1/12 of the credits each month for the next 12 months. These credits do not expire for 1 year after they've been applied.
• If a customer uses all credits in a month, they will be billed for extra usage at the standard rate.

Non-profit discounts

We offer additional discounts to non-profits:

• For credit purchases below $25k: 15% discount (instead of standard 10% self-serve or no discount)
• For credit purchases $25k - $100k: An additional 5% on top of standard volume discount
• For credit purchases above $100k: Standard volume discounts apply (no additional non-profit discount)

We use tax law in the country of origin to determine what is a not for profit entity. If a customer can provide proof they fit their country's definition, the discount is applicable subject to the guidance above.

When evaluating a discount, it’s important to review our margin calculations to ensure we remain margin positive, especially for larger accounts.

To set up the non-profit discount in Stripe, follow these instructions.

Non-profit discounts only provide an additional 5% on top of standard volume discounts, and only for credit purchases between $25,000 and $100,000.

Legacy discounts

You might see some customers with a 30% discount on their monthly Stripe subscription. These were added when the only way we billed for PostHog was through event pricing. This was originally designed to offset the cost versus competitors who had unbundled Group Analytics or Data Pipelines. These customers will typically be on a higher per-event price plan, so we should look to get them migrated to standard pricing as soon as possible.

Startup plan discounts

For customers on our startup plan, we offer two months free credit when signing a prepaid deal. This encourages startups to use their credits to understand usage, and then commit to a longer term plan with PostHog. This offer is available until the first billing date after the credits expire. If a customer has used up their credits before the expiration date, they still have until the original expiration date to decide and claim the offer. The amount of free credits is determined by how much they purchase on a prepaid plan. By default, we work with customers on prepaid plans that will cover their usage for the next 12 months.

Important clarification: operationally this is implemented as free credits applied before the contract start date, not as extra credits inside the contract term unless a specific dollar amount for the free credits is explicitly included under Special Terms.

You should follow the same inbound sales process and work with the customer on understanding and optimizing their usage. Then follow these additional steps take to present the prepaid plan + free credits option(s):

1. Review the customer's average monthly cost
2. Estimate the prepaid equivalent for 12 months of coverage (e.g. [monthly cost x 12])
3. Inform them they can take advantage of this offer, which allows them to:

• purchase credits equivalent to ~12 months of usage (expiring 12 months after the contract start date), and
• receive ~2 months of additional usage for free, applied before the contract start date.

1. If the customer wants to purchase fewer credits than the option above, then they will receive an additional 1/6 of the amount they wish to purchase for free.

All free credits associated with startup plan roll-offs are one-time only, and should be denoted in the special terms of the contract as "An additional credit in the amount of XXXXX (offered to customers in exchange for rolling off the Startup plan) to be applied to Customer's account upon signature with the same expiration date."

For contracting purposes, these free credits should either be applied before the contract term or included in the 12 month credit amount. If they are being applied before the contract term, adjust the contract date to start 2 months later and the one-time credits can be applied to cover the 2 invoices before the contract start date. In this case, the credits do not need to be called out in the contract, and the opportunity owner can add these credits as a one time credit in billing admin.

How to structure free credits in special terms

There are three ways we structure free credits, and it's important to be clear which one applies, because they're added at different times and treated differently at contract start:

1. Fixed amount included in the 12 month term. The free credits are part of the contract term and are added to the customer's balance alongside the purchased (prepaid) credits at contract start. Use this when a specific dollar amount of free credit is explicitly called out under Special Terms as part of the term.

1. Coverage for a specific number of months. The free credits are not part of the contract term. We add enough free credits to cover the promised period (for example, up to the contract start date), top up if the customer comes up short before then, and add the prepaid credits only when the contract actually starts. Any free-credit balance still remaining at contract start is removed at that point. These credits can be added via billing admin as a one time credit and don't need to be called out as part of the term.

1. Fixed amount included in an extended term (contract buyouts). The free credits are part of the contract term, but the term itself is longer than standard because it absorbs the buyout period: 12 months of paid usage plus a 6 month buyout becomes an 18 month term. Use this whenever we're buying a customer out of a competitor contract. See contract buyouts for how to build the order form. Note that this means you won't be able to top up free credits if customer uses them faster than originally planned. If you think this may be the case, default to option 2.

Margin negative deals

In exceptional circumstances, we may explore providing additional discounts which eat into our operating margin for the following cases:

1. They are a strategic logo we'd like to land as a brand-new customer.
2. We are taking their business from a competitor.
3. We are preventing them from churning to a competitor.

For the avoidance of doubt, these types of deals are very rare (~1 per year), and not offered to customers with standard usage volumes.

If you believe you have a customer who falls into one of these categories and would like to provide additional credit/discount then in the first instance run through the opportunity details including margin calculation with your manager, who will then clear it with Simon (CSMs) or Ben (TAEs/TAMs).

Additional credit purchase

As it's often difficult to right-size the credit needed for a longer term plan as a standard we offer to honor the discount provided in the original purchase for any additional credit purchased in the first half of a contract term (e.g. 6 months for an annual plan). Within the first 6 months given our billing usage reports we should be able to predict whether the customer is going to run out of credit or not. There are also alerts set up in #sales-alerts to help notify account owners about this.

Price guarantees & lock-ins

We do not offer price guarantees for the following reasons:

1. We sometimes lower prices, which would result in higher costs for customers who've locked in a price
2. We occasionally split or restructure products (e.g. Data Pipelines unbundled), which makes guarantees administratively complex
3. Customers are in full control of their usage and can thus adjust their spending patterns as needed

This request most often comes from procurement teams unfamiliar with our pricing philosophy. Address it proactively in commercial discussions, but if there is push back, reference the above points. As an example:

"We've dropped Events pricing [X]% over [timeframe]. A price guarantee would have cost you more. We're committed to matching the cheapest at every scale—if we're not, tell us. Our prepaid credits for usage based pricing gives budget control without betting against our commitment to low prices."

Multi-year credit allocation

Paid up-front

We will allocate all the credit purchased to the Stripe account when the contract is signed. As above, they can purchase additional credit in the first half of the contract term and take advantage of the same discount as specified in the original contract.

Paid yearly

We will allocate the credit for that year to the Stripe account when the contract is signed, and then again when subsequent annual invoices are raised.

If a customer wishes to use subsequent year's credit early they must agree to pay the invoice for that year early before the credit is transferred.

The additional credit purchase applies to each year separately, e.g. they can purchase additional credits at the same discount level in the first 6 months of each year.

You can see a signed multi-year contract set up in this way by navigating to Documents -> Examples (folder) inside of PandaDoc.

Uptime SLA

Customers only get an uptime SLA if:

1. They have subscribed to the Enterprise package; or
2. You agree it with them as a special term as part of their contract if they are spending $100k+ ARR _post_ discount (i.e. $ spend, not credit usage).

An uptime SLA are not available to customers outside of these cases. You should certainly not agree to an SLA for customers on regular monthly contracts, and even for annual contracts it is not a given - it's one of multiple pieces you may have in play as you negotiate terms (much like a case study).

More details on how exactly the uptime SLA works can be found in our terms.

Payment method

For customers paying monthly, we only accept credit card payments, which will be taken automatically via Stripe at the end of their monthly billing period.

For customers purchasing credits upfront, we only take bank transfers because:

• For large payment amounts, the fees we incur are higher for credit card payments.
• Our Sales Ops automations are set up to handle bank transfer payments.

You should confirm ahead of the customer signing the order form that they are happy and set up to pay by bank transfer. If they are absolutely unable to accommodate bank transfer we can accept credit card payments under the following conditions:

• We have a card on file which we can immediately charge for the full invoice amount.
• They pay immediately on the contract start date (i.e. no Net 30)

If your customer must pay via credit card, you absolutely _need_ to let Mine (Simon as backup) know ahead of the order form being signed as there is a lot of manual work needed up front to make this work.

We absolutely do not allow payment by check. This is made clear on order forms.

Contract buyouts

Are you a potential customer who wants to speak to us about a contract buyout? Get in touch with the Sales team via your shared Slack channel, or reach out directly.

Sometimes customers will be locked into a contract with a competitor, but want to switch to PostHog when their contract is up. In this case, we are willing to give them free PostHog credits for up to 6 months of their total PostHog contract value. This is beneficial to PostHog as well, as we can get them set up and using PostHog sooner, capitalizing on the momentum of their interest today, and giving them more time or resources to get comfortable with the platform.

The guiding principle: The buyout amount needs to make financial sense

When considering a contract buyout, the goal is for PostHog to pay a little up front to make more money over a long-term customer relationship. It doesn't make sense to buy out a contract for $60k if the customer is only planning on spending $20k annually with PostHog.

Some rules:

• They need to share a copy of their current contract/pricing/bank statement as proof.
• They sign up to an annual contract worth $20k+/year, paid up front.
• Their usage in the overlap period needs to be proportionate to the contract they've signed with PostHog, ie. if they sign a $50k PostHog contract and have 6 months to run, they get $25k of PostHog credit for free.
• The competitor they're using has to be 'real', ie. not some random side project. As a general rule, anyone we have written a comparison article about counts.
• Any buyout is subject to team lead approval before it goes on an order form.
• We have final discretion on deciding who gets the deal.
• We can still provide a standard free trial period of 2-4 weeks before they sign the contract, as they will likely need to figure out whether PostHog is right for them before committing.

Normal commission rules apply here - commission is paid in the quarter in which the customer pays their invoice.

How to structure a buyout on the order form

Buyouts used to get papered in one of two ways: future-dating the order form so the term began when the incumbent contract expired, or sprinkling extra free credits onto an otherwise normal order. Both cost us — the first is effectively extended payment terms and delays when the deal counts, the second cuts order value hard enough to flirt with margin negative. Neither is how we do it now.

Instead, fold the buyout period into the contract term:

• Contract term = standard term + buyout period. A 12 month deal with a 6 month buyout is an 18 month term. A 2 year deal with a 6 month buyout is a 30 month term.
• Credits are calculated as usual — 12 months of estimated usage, multiplied by the number of years — and then the pro-rated buyout credit is added on top.
• Exclude the buyout credits when calculating the discount we offer the customer. The buyout credit is not a lever for a bigger discount.
• Show the contracted discount on the order form, not the effective discount. The effective discount (total paid ÷ total credit) will always look larger than the contracted one because of the free buyout credit. Quoting the effective number sets a false floor for the renewal.
• Everything else is standard — term start date, payment terms, and signature dates all follow our normal rules. There is no future-dating and no separate payment schedule.
• Call out the buyout credit in Special Terms: _"In consideration of Customer migrating to PostHog from its incumbent provider prior to the expiration of Customer's existing agreement with that provider, PostHog will provide a one-time credit in the amount of $NNNNN."_

As a worked example: a customer expected to use ~$100k of credit a year, with 6 months left on their incumbent contract, at a 30% discount. They buy $100k of credit for $70k, we add $50k of buyout credit on top, and the order form is an 18 month term for $150k of total credit at a 30% discount. The effective discount lands north of 50%, which is expected and stays off the order form.

This is also structure 3 in how to structure free credits in special terms.

New business renewal credits

If a customer is currently _not_ a paying user of PostHog, but is a user of one of our competitors, about to renew, and is shopping for a better deal, we are willing to significantly undercut the quoted renewal price. This is because those customers are not that likely to move over to us anyway, and quoting them a lower price works out in our favour either way:

1. If the competitor matches our much lower offer, and the customer accepts, we've reduced their revenue by a significant amount
2. If the customer accepts, we've gained net new revenue we otherwise would have missed out on, and we have the opportunity to sell more.

In order for this to not mess up later renewals, the way we do this is by giving them credit for the first year in order to reach a total discount of 40%. For example, if the quote from the competitor is $50k, and the total cost for our product (including other discounts) is $40k, we will give them additional credits worth $10k, in order to undercut the total quote by 40%.

In order to qualify for this, the customer needs to send us the full quote document from the competitor.

Contracts for customers on time-limited plans

Some customers are on a plan that is cheaper than list pricing and has an end date — a campaign coupon (Lenny's Newsletter grants a free Scale package and 2x free tier limits for 12 months), a beta plan for a product we haven't finished pricing, or a promotional increase to their free tier. These customers are paying us today, and they will pay more for the same usage once the plan ends.

This covers pricing packages granted in Billing, not the Stripe coupons and discounts we apply per contract (legacy 30% off, non-profit discounts, and so on). This is also not the same situation as the startup plan. Startup credits make usage free, which is why we future-date that contract to sit after the free period.

Don't touch the plan to close the deal

Don't extend, swap, or cancel a customer's coupon or beta plan as a negotiating lever, or promise to carry its benefits into the contract term. Campaign benefits expire automatically and move the customer onto the standard paid plan with nobody doing anything. Every manual exception replaces that with a bespoke plan configuration plus something a human has to remember to undo months later, which is how we end up with legacy plans we then spend months migrating people off.

The contract itself is standard

Start date follows the normal rules. Discounts follow the standard levers.

Size the credits for the step-up

Because the plan may end partway through the term, credits burn at one rate before that date and a faster rate after it. Sizing on today's spend may undersize the deal.

If the plan has a known end date you can blend the two rates:

(months remaining on the plan × current monthly run rate) + (remaining months of the term × post-plan monthly run rate)

Apply your usual growth assumption to both halves. The post-plan run rate is their current spend plus whatever the plan is currently absorbing: the list price of any free add-on, and the usage that currently falls inside an inflated free tier.

If the plan has no fixed end date (e.g. beta plans where we may change pricing at any time) don't guess. Size on current usage, tell the customer that pricing isn't final, and use the additional credit purchase provision to right-size once pricing changes.

Tell the customer about the step-up

Their costs rise on a known date whether or not they sign, so it belongs in the conversation. It's a reason to commit now, rather than something for them to discover at renewal. Sizing it properly often moves them into a better volume discount tier as well, which is a much better trade than giving away the plan benefits.

Credit over/under usage for contracts

When they don't have enough credit to cover their term

We have CreditBot alerts set up in #sales-alerts when a customer is going to run out of credit before their contract term ends, with the estimated runway remaining. The Vitally account owner (AE or CSM) will be tagged in this message. It's best to be proactive here so that the customer is right-sized well before the credit runs out:

• If they will run out of credit or wish to buy more within the first half of the contract term (1 year = 6 months, 2 years = 12 months, 3 years = 18 months), they can still take advantage of their initial discount. You'll need to have them sign a new order form which adds the additional credit, and it should expire on the date of the original order form.
• Example: Their original order form was signed on 1st January with a 12-month term. Their expansion order form could be signed on 1st June with a 7-month term. Make sure the end date lines up with the end date of the original contract to avoid any issues with the billing server and ARR calculation.
• If they will run out of credit with less than 2 months remaining on their initial term, as long as they sign a renewal order form to start at the end of the original contract term we will cover their usage for free until the renewal date, assuming the renewal order form is signed before they run out of credit and their new contract amount is equal to or greater than the current contract amount.
• If they fall in between the two cases above (running out of credit with <6 months and >2 months to go) then we need them to sign a new 12 month (or longer) order form lined up with their monthly billing date. This makes ARR calculation slightly trickier as there are two overlapping contracts in play at the same time.
• Example: Their original order form was signed on 1st January with a 12-month term and they run out of credits in September. We need a new 12-month order form in place with a Contract Start Date of September 1st.

How to actually cover the gap

Where we've agreed to cover usage for free until the renewal date, do it by adding a one-off credit allocation to the customer's credit balance in billing admin. You don't need billing engineering to do this.

Always add the credit _before_ the invoice is generated. If you wait for the invoice and credit it afterwards, we've charged the customer an amount we already knew we weren't going to collect.

You don't need to get the amount exactly right. Add your best estimate of the remaining usage and top it up the day before invoice is generated if it falls short. Over-allocating is fine: the balance resets at the actual contract end date, so anything left over doesn't carry into the new contract. Make sure to note this in other details field in the related Salesforce opportunity so the revops team can make sure the final credit balance is correct during contract setup.

For any of the above scenarios you should use our discounting principles which apply to the credit purchase amount.

In scenario one above, if their expansion credit purchase takes them into a higher volume discount tier, we should include this discount tier for them in the expansion contract. We won't issue a refund for the difference in discount when the expansion order form discount tier is greater than the discount tier of the original order form.

When they will end the contract term with credit remaining

If a customer ends a term with unused credits and signs a renewal of equal or higher spend, we roll over part of their _remaining_ (unused) credits into the new term. The pre-paid plans doc is the source of truth for the exact amount and the customer-facing wording, so keep the mechanic there and link to it rather than restating it here (this is where these two pages had drifted).

We scale the rollover to _remaining_ credits rather than the original order form amount. For a customer who underused and renews at equal spend, rolling a share of the original on top of the renewal stacks up more credits than they were ever going to use, which rewards a mis-sized deal with a bigger pile and makes the account harder to expand later. Scaling to what they actually didn't use keeps the balance proportionate.

Where the underuse was outside the customer's control (a PostHog-side incident, a data issue on our side, or a documented disruption on theirs), we can roll over more than the standard amount, up to the full remaining balance, or extend the window to use existing credits. We handle these case by case based on what was logged at the time, so flag it early.

When a customer doesn't renew their credit purchase

When a customer chooses not to renew a prepaid credit contract we automatically remove any remaining credits on the expiry date. Their account will then roll onto our standard monthly plan and they'll be charged for usage. It's the customer's responsibility to stop sending us events or cancel their subscription and downgrade to the free tier if they don't want to keep paying.

Varying contractual terms

When we vary terms

If a customer wants to vary either our standard template DPA, BAA, or MSA terms, it is a substantial effort for our legal team to review these suggested changes (also known as "redlines").

At a minimum, we will only do this for contracts above $20k a year, and we should expect even higher amounts of committed revenue if they are asking for big changes (e.g. changing significant provisions, adding Service Level Agreements, etc.). A customer needs to either be spending this amount at present, or agree to commit to this spend via an annual contract, in order to initiate legal review of suggested changes. We evaluate all requested changes proportionally against their annual committed spend with PostHog. A customers annual committed spend needs to be defined before proceeding to a negotiation over legal terms, otherwise there is no frame of reference for the negotiation.

We also sometimes receive unsolicited requests to vary our terms. In these instances the legal team will redirect the customer to work with their PostHog contact person for this, as we will only review redlines for a managed customer or opportunity where the potential annual revenue is understood.

See the guidance below if the customer asks to use their own contract instead of ours

How customers should suggest requested terms

The customer should redline the current .docx version of the document in question. You can find the latest versions of the templates in the Legal Documents tab in the #group-cs-sales-support Slack channel, or here — MSA, DPA, NDA (do not save versions locally).

Never send a template from a local copy, a previous deal, or a forwarded thread. The templates are revised regularly and sometimes materially. Sending a stale template means negotiating from terms we no longer offer, and it's a lot of wasted legal time to unwind.

We don't accept redlines on our standard terms of service and if a customer has proposed this you should share the correct templates with them before involving legal.

Once they have returned the redlines to you first check to ensure that they have used the template which you provided, and then share the document for review in the #legal channel. There will usually be a few rounds of back and forth as we converge on an agreement. You will continue to represent PostHog's position to your customer throughout the negotiation. Please work with #legal on the appropriate responses and speak clearly to our customers.

What customers should expect

PostHog evaluates legal risk assumed against annual revenue received. In other words, contractual terms will be varied in proportion to the customer's committed annual spend with PostHog.

To illustrate with examples:

• A customer committing to spend just $20k USD annually should not expect significant deviations from PostHog's standard terms. Minor, clarifying edits will be acceptable. We will not spend our time going back and forth for this amount. We may respond to significant changes with a polite, "no," rather than negotiating, to communicate clearly.
• A customer committing to spend $80k USD annually would be able to request slightly more sigificant deviations from PostHog's standard terms, and we will evaluate the suggested terms through the lens of legal risk assumed against annual revenue received. This will be a negotiation, and we will represent PostHog's position clearly as we go along.
• A customer committing to spend $160k USD annually (or more) would be able request even more sigificant deviations from PostHog's standard terms, and we will evaluate the suggested terms through the lens of legal risk assumed against annual revenue received. This will be a negotiation, and we will represent PostHog's position clearly as we go along.

At any potential level of annual spend, PostHog will not proceed under unreasonable legal terms. Certain suggested terms may be non-starters for PostHog.

Varying terms for trials and proofs of concept (POCs) for prospective customers

We don't vary PostHog's standard terms for trials and proofs of concepts (POCs) for prospective customers.

All prospective customers are welcome to try PostHog for free and under our standard terms (including our standard DPA and BAA, if applicable).

We don't negotiate terms for trials and POCs for three reasons:

1. Unlike many of our competitors, an annual subscription is not required to access PostHog, so a negotiated agreement is not necessary to use our services. Our product-led motion is designed to support customers trying PostHog.
2. When evaluating custom legal terms, PostHog evaluates legal risk assumed against annual revenue received.
3. Because prospective customers are paying us $0 for a free, sales-led trial or POC, there is no frame of reference for us to evaluate any potential custom terms. Spending our time and legal resources negotiating these terms is premature when a prospective customer doesn't know that they want to proceed with PostHog at all, much more at a qualifying level of annual usage.

Once the trial concludes, and per our guidance on varying terms, we will be happy to evaluate custom legal terms for an otherwise qualified PostHog customer.

Using non-PostHog contracts

If a customer requests to use a non-PostHog drafted contract for documents such as a DPA, MSA, Order Form, or BAA, we generally decline, except in special circumstances (see 'When we vary terms for customers'). We avoid doing this as it adds too much risk for us, and also because reviewing and negotiating non-standard terms introduces significant operational inefficiencies and doesn't scale well as we continue to grow. We typically do not even consider using customer paper unless the deal is over $200k annually or involves an extremely blue-chip company. It is best to manage this expectation early and just avoid entertaining the idea with customers as soon as possible.

We are somewhat more flexible when it comes to NDAs. That said, since we contract through our U.S. entity, we require customer NDAs to be governed by U.S. law. This is necessary to maintain consistency and ensure we’re not taking on legal or operational risk in jurisdictions where we don’t operate or fully understand the legal landscape. This is mainly about ensuring we can review and manage agreements efficiently with our limited legal resources.