I'm in talks with a business to partner on building a new piece of software. The companies budget for the software is too small to build it, but they are open to discussing sharing the product's revenue. Since I've never been involved in this type of negotiation I'm trying to find as much research on this topic as I can before we negotiate the terms.
Does it make sense to structure revenue ownership based on the estimation of cost of building the software? If putting up all the money would result in ownership of 100% of the revenue and putting up no money would be 0% ownership then some portion of that would be the percentage of ownership. How would it be best to handle purchasing additional ownership over time? Are there some general guidelines for how to handle this? Say they can't purchase more ownership until 200% of the original cost is repaid, etc.
How does sharing the revenue of a product like this if another company wants to purchase their company? Would sharing this product cause some businesses to be uninterested in purchasing them?
What sort of controls need to be in place to verify any revenue generated from selling this product? What are some typical provisions put into the contract to ensure we can audit each others' books as it relates to this product. Are there any controls/tools that need to be setup that can enable this? Escrow accounts, shared accounts, etc?
