Revenue sharing for mobile app development
I have a company that is interested in developing my mobile app idea for me. They are vey interested in ongoing development of it and will even help with marketing. They are asking for a revenue share of 70/30. I wouldn't have to invest any money, only consultation.
Does this seem reasonable?
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seems like a good deal to me - you do no work, and get money. They take all the risk and investment and they get 70%. Seems fair. Just make sure you can audit their numbers somehow? – Tim J 12 years ago
6 Answers
Quoting one of my very intelligent friends who is the COO at Rapidsoft Systems, a leading developer of outsourced software, most ideas without capital to execute them have little or no value. If they did, then there would have been an "idea market" like stock exchange in every city.
Even highly evolved ideas with patents have no value unless you can create a product based on those ideas and sell them. So, money is the real value creator.
A slight investment will leverage your position in the deal. As Raj said, you can even demand better share. On the other note the key is to devise a model to share the store numbers transparently. This arrangement looks good if its a paid app. If this is free and the share is on the add revenue then be prepared to wait for a pretty long time to actually see $$$.
I've been researching this, and your deal could be a good one. Like the others said, you need to have an idea of development expenses and likely revenue. Know that the app store will keep about 30%, so you're getting 30% of the remaining 70%, or about 20% of gross revenue.
It will depend on the revenue you are estimating from the Apps and also the cost of development if you outsource the development to a third party developer.
If the development cost is high, I feel the ratio is good. You need to have a very robust agreement in place with the advice of your legal professional.
General advice - IANAL.
I would look close at the agreement to determine who actually owns the code after it is built - otherwise, you could be left out in the dark if someone considers flipping / selling assets to another company. Lawyer up before agreeing to this.
Kevin - thats a great offer. But if you really believe in the idea, invest a little bit in the game so that the breakdown comes to 50%-50%
Also, can you share the name of the company just in case any one else has a similar game idea! Thanks
