4 ms·

Are you looking for a sales rep or a cofounder? If the former, high commissions are motivating. Anything the rep sells at this point is a sale you wouldn't oth

Are you looking for a sales rep or a cofounder? If the former, high commissions are motivating. Anything the rep sells at this point is a sale you wouldn't otherwise have. If you're worried about the "wrong" kind of sale, you can put bounds on what you'll pay commission on, like "nothing below $X dollars" or "nothing if the company doesn't fit the definition of 'good fit'". If you're looking for a cofounder, then give them a meaningful equity chunk of the company, vested over 4 years. Sales is hard enough -- don't try to come up with a comp plan that adds a bunch of complexity to a rep's decisionmaking. When a customer is ready to buy, you want in clear in the reps head whether they should push for a longer contract, or a higher per-month rate, or a strategic fit for product development. What does your company need right now?

Gustomaximus 11y ago
An additional thought. Given the sales guy is an unknown (enthusiasm means little against results) why not put equity into sales results. E.g. 1% equity against every $10k in sales up to XX% + some level of reduced commission if this seems fair to include. Also you can put a minimum sales in so if he turns to a dud or loses interest quickly you don't have some random with a tiny share. And make sure you have a get out of gaol card if they are no good. You don't want some one burning your hottest leads if they can't get over the line.
- notahacker 11y ago
  This sounds like it's offering salespeople the worst of both worlds: they have the cofounder's risk that the equity is worthless unless they do everything in their power to help the company succeed for as long as it takes, and yet they're not being treated like a cofounder in terms of share of equity and influence at the start. And the people that want to share in the growth of a company they've helped run and the people that choose to work commission-only roles because they like the autonomy and are confident they earn more being paid on performance tend to be different people. If you want a cofounding salesperson, offer them a cofounder equity share and responsibility from the start (with a vesting schedule, a cliff, and an expectation of what they should deliver that may include a sales target). If you want a hired gun that gets paid purely on performance, you ought to be in a position to pay them a share of the cash they bring in which is what they really want.

Gustomaximus 11y ago

An additional thought. Given the sales guy is an unknown (enthusiasm means little against results) why not put equity into sales results. E.g. 1% equity against every $10k in sales up to XX% + some level of reduced commission if this seems fair to include. Also you can put a minimum sales in so if he turns to a dud or loses interest quickly you don't have some random with a tiny share. And make sure you have a get out of gaol card if they are no good. You don't want some one burning your hottest leads if they can't get over the line.

notahacker 11y ago
This sounds like it's offering salespeople the worst of both worlds: they have the cofounder's risk that the equity is worthless unless they do everything in their power to help the company succeed for as long as it takes, and yet they're not being treated like a cofounder in terms of share of equity and influence at the start. And the people that want to share in the growth of a company they've helped run and the people that choose to work commission-only roles because they like the autonomy and are confident they earn more being paid on performance tend to be different people. If you want a cofounding salesperson, offer them a cofounder equity share and responsibility from the start (with a vesting schedule, a cliff, and an expectation of what they should deliver that may include a sales target). If you want a hired gun that gets paid purely on performance, you ought to be in a position to pay them a share of the cash they bring in which is what they really want.