2 ms·
The profit sharing part sounds odd as described. Cost of dev time is constantly increasing at a variable rate, so there would be automatic dilution baked in.
by dasil003 7y ago
The profit sharing part sounds odd as described. Cost of dev time is constantly increasing at a variable rate, so there would be automatic dilution baked in. Similarly by accepting any amount of money, you could be giving away a majority stake (and making a major commitment) before you even get started.
Generally I think it's worthwhile to think of customers and investors as separate entities and use established paradigms to deal with them. Ultimately you could have a combined customer-investor, but the deal needs to make sense from both perspectives. Learn about seed stage investment and how deals are structured in order to balance control with the interests of both sides.
If you're not careful it would be very easy to set up a deal with radically misaligned expectations on both sides, and without the right structure, a customer-investor could end up taking you for a real ride.