Hello! I launched a short term rental property management company called superhostphilly.com a week ago and have one client. All the operations are mostly automated and in place due to testing them out on my own properties and I am looking for a cofounder to run the sales as I don’t have the time. The average Profit from each sale is around 1k per month to the business. I want To get to 20 properties before considering quitting my day job. Given this info what do you think would be fair partnership agreement and split with the sales cofounder I select? My initial thought was something like x percent equity per sale up to x percent total equity. Not sure what the x would be!
It also depends on how many co-founders you have and how many you want to get on board.
As I am after big team, Chief co-founders are offered between 4% and 7% each (CEO has much more). And our (at RN venture) CSO is also a CFO, so has 2x more equity
You're essentially asking for a commission-only salesperson to join your team. In my experience, you're not going to find someone interested in an equity position for a new company that hasn't proven a sales track record, dependent on them being able to make the sale. There's simply too much risk, and unlikely anyone to take 100% of the risk you're asking to shift.
Salespeople that work on 100% commission still need support which includes training, a budget to go acquire clients, and a product that can actually be sold. These risk-takers generally receive 50% of the gross sales because of the extremely high risk, perhaps even more for a product that hasn't been tested in the marketplace.
My guess is that you'll be selling part-time until you figure out what it takes to bring in clients reliably. And at that point, you may be ready to make it your full-time job without a salesperson.
As salespeople you know. I am betting not one of them would take an equity deal for your stage of business.