3 ms·
A couple of thoughts: (1) as a business owner I would be very wary of a perpetual cut, so I would cap it. (2) since you're capping it you can demand a larger
by lrm242 17y ago
A couple of thoughts:
(1) as a business owner I would be very wary of a perpetual cut, so I would cap it.
(2) since you're capping it you can demand a larger cut to ensure that you're repaid faster.
I would propose something that would enable you to earn ~2-3x your initial proposal cost over a period of approximately 1-2 years. Ultimately you're giving them a loan. This is "owner financed software development". Think about it in terms of interest rates and the cost of money, not in terms of becoming their partner.
Furthermore, you might find that you can secure collateral for your loan. For example, they agree to pay you over time and secure that opportunity with you by making you a secured creditor on their books.
- stijnm 17y agoGood advice. Make sure you recoupe your costs - unless you are prepared to carry some of the cost as a strategic decision for your company. I am wary of the fact you say 'promising new startup'. I would err on the side of caution and assume it isn't the giant success they(/you) hope it will be. As a result, I would spread the risk: - Ask for a 'normal' payment, within their budget, trying to cover at least 50% of your cost estimate. - Then be as daring as you may negotiating your transaction cut on the gross. So, I would reduce my risk as much as possible - who knows if it will take off?