

Ask HN: Joint venture negotiation advice..? - ntoll

Some context: I took the plunge and left my programming job last September to build something useful: a simple yet easy to customize web-application for the HR/recruitment market.<p>I recently demonstrated an early version (about 60% complete) to the founder/CEO and technical director of a well established HR consultancy that also provide bespoke recruitment software to large organizations. The meeting was very positive:<p>* It confirmed my application was doing the right things as far as HR people are concerned<p>* We "got" each other's outlook<p>* We had similar visions of how technology might shape HR/recruitment in the future<p>They recently got back to me and have proposed a joint venture based on my product: they pay me whilst I complete the product, I would retain ownership of the product so long as they have some sort of exclusivity in a revenue sharing deal.<p>This is a good opportunity: I'd get a route to market, a pool of HR expertise to draw from and an established partner.<p>However, I'm a software developer (among other things) and this is my first "venture". My biggest concern is my naivete so I'd like to ask the HN community for advice:<p>* I'll register a new company through which I'll do this work (rather than just being "that guy hacking away on stuff"). Any tips on how best to do/structure this? Or is it as easy as it looks (in the UK)?<p>* Exclusivity contract: I'm assuming it will be for version X of product Y in location L for duration D in market M. Currently, M=Govt/public sector/"third" sector and doesn't include the private sector. What should I expect for L and D and what else might one typically negotiate (I was thinking in terms of sales targets)?<p>* Revenue sharing: I'm (again) assuming we'll be negotiating on % of sale price. What are typical percentages for the split between software developer / reseller?<p>* Any legal gotchas I should know of / avoid?<p>* Anything else I might need to know when getting into a situation like this..?<p>My personal long term aim is serial entrepreneurship.<p>Thanks in advance... :-)
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medianama
Based on my experience - Never do "exclusivity in a revenue sharing deal"
unless they offer a significantly large minimum guarantee.

We had a joke in our company - 50% of zero revenue is zero. %age share doesn't
matter in these deals...

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ntoll
Quite...

