I have been approached by a friend to help with the business side of a venture that he has developed/bootstrapped. No external funding until now. He has developed a working product with outsourced and his own development efforts. He has incorporated this company already. However, there are no paying customers in the target market. He has asked me to help him do one of the following:
1. develop a revenue generating partnership
2. sell the product and technology to an interested party
3. help raise funding so that the business can scale
I am being offered a 20% commission on the gross amount that I bring in through 1), 2) or 3). He also mentioned that if we went with option 1) then he could bring me on board with the company at a mutually agreed upon company ownership and commission structure.
Is the above compensation of 20% commission and no equity in the company reasonable?
My concern is that if I were to draft the sales pitch, prospect targets through my network and help close the deal, he could really stick it to me by either not giving me sufficient equity or not bringing me on at all as he will have at least one referencable partner/customer.
What are some fair terms that I should be asking for?