So a friend was intro’d to a company. He secured a high-commission outsourced sales agreement with them to potentially sell their product.

They also asked him to try to raise their seed round.

He asked me for help closing a customer. And we agreed I would take 40% of the sales commission he gets for that company.

But the work is entirely on me.

Then I raised them their $1.4m seed round, and gave him 60% of the fees from that.

Now they want to raise $15m and I have now sourced a potential dozen customers.

I think there is no reason I should be paying my friend a commission. I am operating on my own leads, paying my own bills related to traveling to talk to these companies, there are no leads, no infrastructure, no reputation he is lending me to aid in my doing business. And I am going to raise the entirety of the $15m and think it would be ridiculous to give him $500k simply for having intro’d me 2 years ago to this company.

The one area he does bring a benefit is that the sales commission he negotiated is very high, so maybe negotiating to like 75/25 there makes sense. Because it’s more than what I would get at 100% commission of their other sales partnerships contracts.

What’s your advice/thoughts?

Thanks

    • soulsurfer3@alien.topBEnglish
      1·
      1 year ago

      I started the first influencer marketing agency and sold in 2020. Working on my third start up.

      • fainfaintame@alien.topBEnglish
        1·
        1 year ago

        That’s what I mean. I’ve been a part of over hundreds of raises both public and private. Finders is not unusual to be paid and is very common. Many people build strategies around them to align strategic people early on.

        If I placed 1M from my network into a startup that wasn’t mine, there’s no way I’m leaving 80-100k on the table. Many businesses will try to pay as much of it in shares rather than cash.