Client work rev share as payment

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MSTeacher

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Jun 19, 2010
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Looking for advice on this.

A satisfied client of mine is starting a new thing and offered 20% of revenues rather than ongoing payment. It's SEO, writing, online networking.

It seems like a good gig because it's potentially a 2-3k/week site in a low/mid competition market that I've already worked with him in. Not too hard to rank the site well and maintain it. Could be a nice residual paycheck.

If I do it I'm going to include a couple stipulations in the contract, like

- gateway access to verify sales
- rev sharing is non-expiring and transferable in case the site or company changes hands

Anyone have experience with this, either in seo or running ppc campaigns for clients?

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Only advice I can give is, it won't work out as good as you hope. Nothing does. That's life.

So only go into it if you think it's a perfect fit, and will be absolutely amazing. That way the end result will probably be, "good and worth my time & effort". If you're currently thinking, "yeah, it will probably be ok, but I'm not really sure", then you'll probably regret doing it later on.
 
If its a balls to the wall rev share, ask for 50% and accept 35%

Considering the fact that 50% of 0 is jack shit I would ask for benchmarks and include some caveats.

Is the client investing any physical assets? If he goes tits up, you should get a percentage of the value of these.

I'm not a big fan of the whole 'work for free' thing.
 
MSTeacher said:
Yeah same, that's my concern.

I was considering asking for something like you mentioned, if the company goes poof then the 20% applies to the remaining assets at that point. Hmm.
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In my experience 'rev share' is a nice way of pre-fucking you before the main event starts. I don't know your personal situation, but it seems like this guy wants you to eat the risk for a percentage that is both small and uncertain.

People don't approach vendors that they respect with deals like this, because they know that it won't fly.

It sounds like you have an advantage because he knows your skill-set and you have a relationship that hes comfortable trying to leverage.

Here's my idea, you 'loan' the company your services for an agreed upon term with the 20% being the interest on that loan.

6 months (or whatever the term of the loan is) go by; you're owed that money no matter what.

When the company is, or ever becomes profitable, you get your 20%.

tldr: Company fails? Fuck you, pay me. Company succeeds? Fuck you, pay me.
 
MSTeacher said:
:( Fuck I know you're right just don't want to hear it.

Not even in a recently proven market with a client with a perfect track record?
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I personally wouldn't do it. More often than not, pre-revenue equity is a way for founders to mitigate their own risk (capital investment) by exchanging "ownership" for free work. I know from my own track record, I've tried quite a few business ideas that didn't pan out even when they looked great on paper.

Just be careful man.
 
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JakeStratham said:
never ever take rev share as payment unless the revenue already exists
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dchuk said:
I personally wouldn't do it. More often than not, pre-revenue equity is a way for founders to mitigate their own risk (capital investment) by exchanging "ownership" for free work. I know from my own track record, I've tried quite a few business ideas that didn't pan out even when they looked great on paper.

Just be careful man.
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Solid advice, thanks.
 
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