"... Shielding your optimism is nowhere more important than with deals. If your startup is doing a deal, just assume it's not going to happen. The VCs who say they're going to invest in you aren't. The company that says they're going to buy you isn't. The big customer who wants to use your system in their whole company won't. Then if things work out you can be pleasantly surprised. ..."
Screw the variable payout notion. It's a hook (as said).
- $6m in 3yrs is a substantial risk and unlikely due to what everyone else said.
- $4m in 2yrs is still a decent time horizon, but as mentioned, they are trying to lure you in for on the promise that it will be hard to pay in 1 year and probably more than they are prepared to spend.
- Try $3m in 18 months with $1.5M upon close and $500k divided over the next 18 months.
You get 75% upfront and can hedge on their success/failure.
Waiting and anticipating checks to arrive is a nightmare and if you are like most, you will be highly bothered by this - whether or not you get your code back. (At which point, it will likely be duplicated elsewhere or deemed irrelevant.)
"... Try $3m in 18 months with $1.5M upon close and $500k divided over the next 18 months. You get 75% upfront and can hedge on their success/failure. ..."
You have not made it clear if you really need the money? Independence is good #5 ~ http://www.paulgraham.com/fundraising.html I also see potential founder fights #17 ~ http://www.paulgraham.com/startupmistakes.html and ...
"... Shielding your optimism is nowhere more important than with deals. If your startup is doing a deal, just assume it's not going to happen. The VCs who say they're going to invest in you aren't. The company that says they're going to buy you isn't. The big customer who wants to use your system in their whole company won't. Then if things work out you can be pleasantly surprised. ..."
Good luck #7 "Dont get your hopes up" ~ http://www.paulgraham.com/startuplessons.html