Revenue share

Revenue share is a payment structure in which a partner or provider receives an agreed percentage of revenue rather than, or in addition to, a fixed fee. In a growth partnership it ties the partner's income to the company's results, so both sides gain from the same outcomes. The percentage, the revenue it applies to and how it is measured are written into a term sheet before work begins.

For British Columbia owners the appeal is access to a full team before the company could afford one on payroll, and a partner with a direct stake in the result. The caution is that revenue share only works when margins can carry it and when the revenue is attributable. A company with thin margins or revenue that depends mostly on factors outside the partner's influence should use a retainer instead, and a good partner will say so.

In practice Ali Sedighi's Growth Partner program uses revenue share, equity or a hybrid retainer plus bonus for Canadian companies doing roughly $500K to $30M with proven demand. The scorecard defines what counts, caps and floors protect both sides where appropriate, and the agreement is reviewed by the company's lawyer. Securities and equity matters go to lawyers and registered advisers. Whatever the structure, the company owns every account and system the team builds.