jgreenough

Our take being acquired, http://www.bankons.com. #500strong

Keep It Simple S*

Do equity and if you agree to share profits later the corp can pay a dividend along the lines of ownership. You can have two classes of stock which is different than investor stock if you want to only pay dividends to founders but it will affect price of investment.

The percentage is a negotiation based on what you think that person can do vs. what you can do without the person. A great product with no development is worth little to nothing. Same thing for great BD with no tech, nothing to sell.

If you want to set up a sales/comp plan then that is slightly different than profit share but since you are tech this does not apply. In comp plans you would pay BD guy a percentage of the sales contract but if you don't know the value of the product then this will be a tough negotiation. Also remember the non-tech person probably has more practice negotiating.

If he wants you as a co-founder negotiate equity starting at 50%. If he wants you as an employee then you should get a salary. This is all a negotiation of who bears the risk. The more risk you bear the more you should get in reward, ie more than 10% for 3-5 years of work. Lots of advice about this on VentureHacks.

This type of conversation begs the "put-up or shut-up answer" and if it works you get a new feature. the real trick is actually dealing with long-term support for something that might have started out as a hack. Features and short-term tests usually need to be refactored for long-term health. If you don't do the work up front be prepared to do a bit later, just make the choice consciously.

Google enables all things adSense, e-Bay enables all things PayPal. There is one more major item that I think is still on their list. Any guesses? Hint it rhymes with Where...