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That sounds very suspicious and is most likely an extremely bad deal for you. 20% might not sound like a big deal while you're still starting – but to put it i
by Archipelagia 4y ago
That sounds very suspicious and is most likely an extremely bad deal for you.
20% might not sound like a big deal while you're still starting – but to put it into perspective, if you work only weekdays, that means every Monday you and every single person on your team are going to be doing unpaid work for that client.
If they were to bring something valuable to the table, then maybe it'd be worth considering. But it sounds like they're just giving you vague promises of bringing unspecified amount of other business?
I think the right way to make that kind of relationship work would be to pay some finder's fee. But even them, I'd be wary of doing anything with that client – obviously there might be more than you hadn't mentioned, but from this post it seems like they're just interested in taking advantage of you. You don't want to be doing business with someone who's out to get you.
EDIT: One more thing that stood out to me. I don't want this to seem offensive, so please take it in a I-want-to-help-you -and-think-it's-important spirit: it seems like you're starting a consultancy without really having any idea where to find clients, right?
This is something that you absolutely need to address with the rest of your founders. Maybe you need to bring a good salesperson on board, maybe some of you need to learn sales, but you definitely shouldn't just go into it without any plan – otherwise you don't have a business, you have a gamble.
- gkdjahgd 4y agoWhat do you think of this idea? - As mentioned in the post, if I give them equity but have a one year cliff and if they don't bring any clients then fire them before one year?
- Archipelagia 4y agoEssentially, you're making them a fifth co-founder of your business. Are you and other founders okay with that? Like, to me it seems you're entering a very problematic relationship, but again, the only info I have is your post. Maybe they are a highly competent, pro-social person that would support you a lot. Based on what you wrote, to me it seems more like they are preying on your desperation to find clients. On top of that, even if they are a great person, your agreement is very vague and can lead to a lot of bad feelings down the road, on both sides: what if they have completely different expectations than you? You seem to expect them to be your main source of new customers, are you sure they see themselves exactly the same way? And all are your team members on the same page? I would very strongly advise you to give them only finder's fee on business they bring. If they are not okay with that, then are they going to treat your consultancy as seriously as all the other co-founders you have? If not, I would avoid this entire relationship.