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I haven't done this myself, so I may be wrong; but wouldn't it make sense to also figure in some cost inflation due to the fact that he is now assuming their ri
by icey 17y ago
I haven't done this myself, so I may be wrong; but wouldn't it make sense to also figure in some cost inflation due to the fact that he is now assuming their risk as well?
If this was an existing company with solid financials, what you are saying makes 100% sense... But this is a startup; there is a reasonably high chance that they won't be around after a year. Like I said; this is way outside of the realm of things I have experience with, so I could be totally off base.
- noodle 17y agodefinitely true. which is why i said 1 to 3 years, and i never said anything about stopping charging that rate after you recoup the costs. there's quite a difference in the rate if you're aiming to recoup the cost in 1 year as opposed to 3. on the one hand, you want to get paid. on the other, if you're going to be getting paid by a % cut, you don't want your % to be so high that it drives a new, possibly fragile startup into the ground. if you ask too much too fast and they die, you'll never get the full total, instead of getting the full total and possibly more if you were comfortable with a slower rate.
- icey 17y agoThat makes a ton of sense; thanks for following up. (It seems like pretty good advice, as well.)