The "All Commission" Early Startup Hire

Young startup founders often feel uncomfortable with B2B sales. It’s especially daunting in “old boy” industries like construction, education or banking.

These teams often want to bring in a “gray hair” experienced professional in that industry to help them with intros and do sales. Makes sense.

Given the startup has little to no money, it will often come up with a structure like:

  • Gray Hair works at startup for no salary.
  • Makes a huge percentage of any sales (40, 60 and even 100%)
  • Gets a salary once the company gets revenue

It’s a nice idea, but it fails in my experience.

The problem is that Gray Hair has no motivation to do the hard work to get early deals. The founders do. That’s why they should be doing sales until they’re too busy.

Better is to sign the “Gray Hair” as a formal advisor with a vesting allocation of shares (<.5%). They can do intros and even go on customer visits. Once companies have revenue/investors and can pay the Gray Hair and have learned how to sell to these customers, they can hire the Gray Hair and say “Here’s how it’s done!”
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