The question is very board and it depends on dozens of factors.
If your talking about developer 1, square 1, your the 'idea man or women' and you approach me with an idea I like it and want to work with you on it. Then I'll likely want some ownership, or revenue sharing as the product couldn't exist without my technical know how (or another developers).
I can see only positives. You don't pay when there is no revenue. You fire him when revenue gets really good. He gets cash faster than with equity, potentially no need to beg for salary raises in future.
One of the main point of revenue sharing is turning it into passive income - for the rest of your life. So no one will ever sign the terms which binds this to employment termination.
I think it makes sense to give equity for being a part of starting something but to have perpetual 5% income seems crazy. I'm guessing, revenue share stops at some point?
5% not much if the developer is the creator and part owner of the product. The product could flop and he makes 0. Spending his time at McDonalds may be more profitable.
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[ 16.3 ms ] story [ 634 ms ] threadIf your talking about developer 1, square 1, your the 'idea man or women' and you approach me with an idea I like it and want to work with you on it. Then I'll likely want some ownership, or revenue sharing as the product couldn't exist without my technical know how (or another developers).