Am I unreasonable to ask for more profit sharing in this startup?

by FrankLTight. Posted on Sep 16, 2020    1    2

We've been offered profit sharing that seems too low. Should I ask for more?

We started work for this client in 2017 at the ground level, before they had financing, and contributed work that helped them get bought. The original people continue to work as the principal movers and shakers.

We've been working probably 20% below market rate, but still with an okay profit margin. Just not great.

It's been 3 years and we're still in the same situation, pay-wise. We've been offered a .25% profit sale on the business if/when it sells. I've been told by one of the founders that they won't sell for less than a certain amount, which is not going to happen for 2 more years, at least (if it does, of course).

Additionally, the contract says we can be fired at any time.

I ran the numbers and if they sell at year 5 (2022) for what they expect, we'll basically get back to what we should have been at the whole time.

I feel like given everything that we've put in, we should see a bonus over market rate of at least 25%. We'd need to receive double the offered profit share to get there.

Am I unreasonable to ask for more share and better guarantees?


Shirtman88 2

You can try to but that could also upset them since you agreed to it and now want to change the deal. I personally don’t like deals that change.

It’s hard to know your relationship and if it’s appropriate to renegotiate.

  FrankLTight 1

We haven't agreed to the offer yet.

Edit: I'll also mention that they've said they're grateful for our work and would do something to repay us for our help in building the business.

I know I should have asked for equity to start with, but really, that was never on the table. At that point we had the choice to walk and didn't. C'est la vie.