Glossary

Market development funds (MDF)

Also called Marketing development funds, Partner marketing funds

Updated October 15, 2026

Definition

Market development funds (MDF) are money a vendor gives channel partners to run marketing that sells the vendor's product, such as webinars, events or paid campaigns. The partner proposes an activity, the vendor approves it in advance and reimburses approved costs once the partner shows proof.

How MDF works

Most MDF programs follow five steps:

Request. The partner proposes an activity: what it is, who it targets, the date, the total cost and the amount requested.
Approve. The vendor checks the proposal against budget and policy and approves an amount, along with the proof it expects.
Run. The partner runs the activity using approved messaging.
Claim. The partner submits invoices, proof of performance and the leads generated.
Reimburse. The vendor checks the claim against the approval and pays.

The approval step matters most. A clear approval that states the amount, the share of cost covered and the proof required makes the claim easy to check. The market development funds guide covers the full workflow and eligibility rules.

Why vendors offer MDF

Partners know their market and have the relationships. Vendors have marketing budget. MDF puts the budget where the relationships are, and it gives partners a reason to market your product rather than a competitor's. Requiring the partner to cover part of the cost, often half, keeps the activities focused on ones the partner believes in.

Who usually gets it

MDF is typically reserved for partners in higher partner tiers, with a signed agreement and a track record. It is common with resellers and value-added resellers that market to their own client base, and less common in referral programs, where a co-marketing activity without funding is often enough.

Example

Cobalt Consulting, a Gold-tier partner, requests $3,000 of MDF to run a webinar on inventory reporting for its retail clients, with a total cost of $6,000. The vendor approves 50% of the cost and asks for the registration list, the recording and the leads.

Cobalt runs the webinar in April. 140 people register, 85 attend and Cobalt submits 12 qualified leads through the partner portal. Cobalt's claim includes the platform and promotion invoices, and the vendor reimburses $3,000 within 30 days. Two of the leads close by September for a combined $28,000 in first-year revenue, which the vendor records against the MDF activity.

FAQ

Frequently asked questions

What is the difference between MDF and co-op funds?

Co-op funds are usually earned as a share of what a partner sells. MDF is usually discretionary: the vendor sets a budget and decides which partner proposals to fund. Many companies use the terms loosely, so define the model you run.

Is MDF paid before or after the activity?

Usually after. The partner pays the costs, submits a claim with invoices and proof of performance, and the vendor reimburses the approved amount.

What counts as proof of performance?

Evidence the approved activity happened as described: invoices, a copy of the ad or email, attendee or registration lists, event photos and the leads the activity produced.

Related terms

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