Have you done this successfully? I am an early stage startup still needing a technical founder (last tech founder discussions ended after six weeks). I have a prototype web application already and, while searching for the right cofounder, I would like to hire developers to work on it using equity or revenue sharing only (my only options at the moment).
What are some good terms to put into a revenue sharing agreement? Is 10% a fair number? I want to be compelling to potential partners and get people to hack on the prototype for me. If someone really works out then maybe they can become a founder or have more significant ownership.
Revenue sharing seems like a good compromise that allows me to defer payment and gives the developer lower risk because they can get paid out sooner than through equity.
Terms I am already familiar with and plan to offer:
* 10% of revenue for 12 months following receipt of first revenue
* Dev also will support the product but that is compensated separately ($/hr at that time)
* The company is responsible for all expenses other than development and support, including marketing, servers