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I second this. You want a revenue share, not a profit share. Never a profit share. It's way too easy to minimize profit (they're going to want to do that any
by marklubi 3y ago
I second this. You want a revenue share, not a profit share. Never a profit share.
It's way too easy to minimize profit (they're going to want to do that anyway to minimize taxes)... hire someone, raises, buy things, lease more office space, etc.
Take the money off the top (revenue) so that you're an expense from the start that they can account for and can't easily manipulate to avoid paying you.
- bruce511 3y agoI concur. Getting a percentage of profit makes you a taxman, and companies will optimize the accounts to pay less tax. In other words translate the phrase "profit share" to "voluntary donation" and the meaning will be the same. If you want uncapped upside then it has to be based on revenue, but even then it can easily be manipulated (A sell to B for pennies, which you get a share of, B sells to the market for the real money.) This is one of those cases where you should have a minimum-number in place, and you should be OK doing the work for just the minimum number. Treat anything else as Voluntary Bonus.