Some input on working for a share vs pay.
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Mycroft Holmes wrote:
Define profit?
The business itself is a consultancy that provides efficiency and optimization consulting to manufacturers. Profit I will share in will be from subscription fees manufacturers pay for the application we develop to provide onsite planning and control for these manufacturers. So I will get 15% of all subs minus all costs, and costs are minimal - callouts and hosting basically.
Mycroft Holmes wrote:
The other side of the coin is will this be a part time work for you (how do you eat!).
I am going to insist on a maximum hours per month clause, because I eat from other work that pays me in the normal way. This guy is a gent of some good standing. I have known him a few months, a few years via twitter, but other friends have known him in person much longer. How is your 'ownership' defined? Straight 10% share block?
Brady Kelly wrote:
Mycroft Holmes wrote:
Define profit?
The business itself is a consultancy that provides efficiency and optimization consulting to manufacturers. Profit I will share in will be from subscription fees manufacturers pay for the application we develop to provide onsite planning and control for these manufacturers. So I will get 15% of all subs minus all costs, and costs are minimal - callouts and hosting basically.
So then the guy starts to calculate with his time, more expensive hosting (that perhaps he is providing) and adding a lot of other costs... Marketing? Who will provide that and where does that come from (well, perhaps he'll do little trips where he tries to sell the product over weekends at a nice places, maybe he'll bring the missus as well)? There's a lot of ways to "smuggle" away money if you're creative. A friend worked for a IT department for a big company here, the IT department was really it's own legal entity owned by the same group. The big company had some way of paying bonuses, paying shareholders, etc, on the profit of the business. But the cost for the IT company was HUGE, they charged the other company 10 times the normal hourly rate for a consultant. So what did they gain by this? The big company could brag about how big percent of the profit they paid out, but most of the money was still retained by the group that owned both the big company and the IT company (whose sole business was to provide IT services to the big company). So regards to profit, can you reallt guarantee the no added costs will be "introduced"? Rather than 15% of the profit, 10% of the subscription fee would better (that at least is harder to try to hide behind "added "costs)?
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
Ah, the joys of Intellectual Property and software services. You will have to be very careful about this because this sounds to be an extremely open ended contract. Are the reasons for termination listed? Who retains ownership of the code?
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
So you get pushed out as soon as the product is viable and get nothing after that. Also you don't get much until it takes off. let's hope they don't coincide. This means that you have given up nearly all rights.
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
You need a lawyer if the terms get tricky and it sounds like the terms are a little trick:
Brady Kelly wrote:
However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding...
That is not good. You are deferring payment until you are no longer needed at which time you will get nothing. First of all, take a small salary. If the owner of the company has invested in you, it is less likely that he will dump you when he thinks you are finished. Change the terms to 15% of profits from the sale of this product and any future products derived from this. This will protect you if the owner decides to hire a student programmer to rewrite your code. The 15% you get should be based on a deliverable with a very specific goal (to avoid feature creep), not on the time you put in as a programmer. I am sure I am missing some stuff here which is why you may need to get an attorney. Good luck.
m.bergman
For Bruce Schneier, quanta only have one state : afraid.
To succeed in the world it is not enough to be stupid, you must also be well-mannered. -- Voltaire
In most cases the only difference between disappointment and depression is your level of commitment. -- Marc Maron
I am not a chatbot
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You need a lawyer if the terms get tricky and it sounds like the terms are a little trick:
Brady Kelly wrote:
However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding...
That is not good. You are deferring payment until you are no longer needed at which time you will get nothing. First of all, take a small salary. If the owner of the company has invested in you, it is less likely that he will dump you when he thinks you are finished. Change the terms to 15% of profits from the sale of this product and any future products derived from this. This will protect you if the owner decides to hire a student programmer to rewrite your code. The 15% you get should be based on a deliverable with a very specific goal (to avoid feature creep), not on the time you put in as a programmer. I am sure I am missing some stuff here which is why you may need to get an attorney. Good luck.
m.bergman
For Bruce Schneier, quanta only have one state : afraid.
To succeed in the world it is not enough to be stupid, you must also be well-mannered. -- Voltaire
In most cases the only difference between disappointment and depression is your level of commitment. -- Marc Maron
I am not a chatbot
Michael Bergman wrote:
Change the terms to 15% of profits from the sale of this product and any future products derived from this
I've managed to achieve that.
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
Unless you own the code and he pays you a license fee when he sells it, there's a fair chance you won't get anything. I'm sure he's a nice guy, but when you've written it, why will he need you? I don't mean to be negative - just go in with your eyes open! Nick
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Unless you own the code and he pays you a license fee when he sells it, there's a fair chance you won't get anything. I'm sure he's a nice guy, but when you've written it, why will he need you? I don't mean to be negative - just go in with your eyes open! Nick
One thing is he has a hopelessly empty spec. He has the method, but without clients to tell him what they need in the spec, and me to add it, he'll go nowhere, but, yes, even if the time when 'it is complete' is far away, that time will come.
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I have been offered 15% of all profit, including from the eventual sale of the product, to develop a shop floor control app, which to me is attractively close to equity. Without the product, the business around it is based purely on his substantial manufacturing expertise, and I am happy to leave that part alone. However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is: Until either party terminates. While I provide 'programming' services. He doesn't quite grok what I mean by 'part ownership in the product', and I would like to elucidate at length as to what I want. However, I'm not quite sure how to present and phrase what I want, so I'm asking for some help in describing to him and stipulating legally what I want.
Brady Kelly wrote:
However, the contract as is stipulates my 15% as 'programming fees', payable while the contract is binding, which is:
Until either party terminates.
While I provide 'programming' services.Sounds like a bad deal. I suspect that if you add something like the following it might make it clearer The programmer owns all rights to code and associated work product including design and ideas. The company is only allowed to use the code so long as the programmer has a financial relationship. The company is not allowed to be sold or otherwise enter into any contracts that do not retain the programmers ownership of the code. On termination the programmer is allowed to use the code in any way they see fit without restriction. Also I suspect that a blanket statement about "15% of all profit" without qualification is risky. As one example, the shop enters into a multi-million dollar contract and just before signing the owner of the shop gives themselve a multi-million dollar raise. Thus there is in fact no profit but there certainly is a lot of money. There are other variations such you might stipulate that you retain all ownership rights until you are paid X amount. That insures that you do in fact get some money and an amount that you find reasonable for the work that you do. Another variation is that you must recieve at least Y amount every year (or month) for it to be considered a finanicial relationship - thus they can't pay you a small token to insure continued usage.