Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Not necessarily. Getting 1% more for you means 1% more for them, which means they may have a bias towards a low price that guarantees a deal.

Instead, you could try a larger commission of any sale price above X, where X is your low estimate of what your company is worth.

Edit: On the other hand, this tilts their incentive towards pursuing low-probability, high-payout situations. If someone is working with ten different companies, and they all compensate with this structure, getting one good sale and ignoring the other nine might be the most rewarding option. On the other hand, if there are nine companies with the "percentage of sale price" structure and one with "higher percentage of price-minus-threshold," compensation, the latter will get all the attention. So this boils down to a brutal, Darwinian struggle to pay your sales guy the right way. At some point, structuring compensation might waste more time and effort than just selling the company yourself.



A related issue is timescales: Negotiators may sacrifice a reduced commission through reduced sale price if it means expediting the process and allowing them to get onto other deals. Founders don't have the same rate of turnover and so have more interest in spending time to raise the sale price.


I think this line of thought is related to Leavitt's "Freakonomics", particularly in his observation of real estate dealers leaving their homes on the market for longer periods of time and getting better prices than those for their clients.




Consider applying for YC's Winter 2027 batch! Applications are open till November 2.

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: