I was writing about my own startup companies, then found Ryan Carson’s post on “building his web applications”.
Here is the part of the post I found particularly interesting, the contract:
Elliott [the developer] will receive 10% of monthly revenues, after the expenses listed above. If he launches the site on time (3pm April 20th), this will increase to 15% (hat tip to Natasha on that idea). When the site hits $25,000 monthly revenue (excluding VAT), his take will increase to 25%.
His monthly cheque will be determined by a snapshot of the revenue on the 1st of every month at 9am.
If the app is sold, Elliott will receive 10% of the cash price, after lawyer and accountancy costs.
I build web applications so I can relate to Elliott here as well as many of you (my readers). The only difference between me and Elliottis that I own the company who knows all the people to hire and how to get it done. My company is called,“MJG International”and establishes these type of business partnerships.
Before I rip apart the Carsonified contract, I want to say quick - Ryan Carson, if you are reading this thank you for sharing the information, it serves as a good example to work from. And certainly I am not accusing you of being dishonest - I just don’t agree with the contract.
Now here is my opinion on the Carsonified-Elliot contract. I’m not sure why Elliott would build the product for no money and 10-25% of the application under certain performance terms. I think this is a really bad contract completely in the favor of Carsonified. Here is why it sucks for Elliott:
Wow, talk about getting kicked in the butt by a contract. Carsonified gets all the cheese for having the idea and negotiating the contract. Good work negotiating, Carsonified!
That is all off the top of my head. Because I’ve been through this I feel it is my duty to protect the on-the-ground workers who can actually finish products. Once I get good at executing and have a lot of successes under my belt, I’ll probably take more like 70% of the product instead of 30%, since the only thing the company partnering with you is doing is have the initial idea, which is important - but everybody has ideas! Execution of the idea means a lot, especially in web development.
Let me assure you that I value the business partnerships I make and their ideas. The contracts I’ve made so far have been fair and everyone has been great to work with! I hope you all reading this can have the same.
Be fair, don’t be square. You rock, peace all.