jamesldavis1OPBtoStartups@indiehackers.space•Sales and capital raise finders fee commission issueEnglish
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1 year agoIts not a tech venture. Its a physical product.
The CEO tried to raise, he just didnt get good offers.
I brought in 100% of the seed round.
I will be bringing in 100% of the Series A.
I will be sourcing all of the deals for my sales. No like platform or anything is provided to me. He negotiated a great sales commission contract under which I can operate, but I see a lot of disincentive to operate at 50% commission. I would pay him into perpetuity.
As far as the finders fee, we did the same thing an IB would do. And we didn’t even take a cut of the deal. We took 8% of the value as equity in the company.
Aware of the capital raise rules. Are we not also all aware that every day every major company in the US violates a dozen laws?
Anyway. The company has a sales agreement with Jerry, he takes 30% of the gross margin, which is much higher than what they give all the other sales organizations they outsource to. I get 40% of that, so about 13%. But its entirely on me to source companies, close em etc. There is no support system for me… the only value Jerry provides is that I can work under his sales agreement.
Then Jerry took 60% of what I raised for the seed round. He wants to take the same for the series A. I think I should give him 0% of the Series A. And maybe 25% of whatever I generate in commissions. And that 25% because he bring a high commission contract I wouldnt otherwise get on my own.