Profit percentage agreement contract

I recently took on a branding project for a small startup. They didn’t have a name for their company (huge red flag I know) so I helped them figure that out. Long explanation to justify my involvement in the project aside, I’ve found myself in the position of writing a contract that needs to include a percentage of future profits made by the company.

Does anyone have experience with creating such a contract? I want to make sure my verbage is air tight and professional. Any help would be greatly appreciated.

Go to The American Bar Association website. They have contract forms you can download with boilerplate language (standard terminology and contract (K) clauses).

If you have any questions you can also hire a lawyer for (I believe) $50 for 3 - 1 hour sessions. There’s a link somewhere. The lawyer will not be tied to you as a client, nor will you have lawyer / client privileges, but it is a very easy way to ask specific questions with an attorney in the field. It will also keep yourself safe. And pretty cheap - those layers are usually at least $150/hr. regularly.

Air tight and professional will likely require the help of an attorney, not advice from a bunch of designers.

Personally, a client that can’t pay in cash and, instead, proposes some percentage of future earnings as payment is a client I stay clear of. Yeah, it would have been nice to have a small percentage of Apple or Microsoft when they were just starting out. But just going by the odds, a company without enough start-up capital to pay a designer is a company starting off on the wrong foot and likely destined for a quick demise.

Figure out how much the job should have cost and make it a payment schedule until it’s paid back. Like B said, if they can’t pay up front for the most basic of things (like not even having a company name???) then be happy if you get that much back.
I’ve never seen a branding campaign done on a percentage of profit. That sorta makes you a partner, in a manner of speaking, and I’d not want my assets tied up in that kind of thing.

We aren’t lawyers.

Awesome! Thank you very much.

They’re paying me a flat rate plus the percentage for the work. This client has proven to make good money with past ventures so I was the one who actually proposed the percentage idea.

I just wanted to get straight to the question I wanted to ask without a backstory. I never even considered talking to a lawyer so I appreciate the advice.

They’re paying upfront for this project and all future projects at a slightly discounted rate. I came up with the name and proposed the additional percentage since I came up with the name of company. This client has proven to make good money in past ventures so I’m just placing a small bet on it happening again.

Anyway, I appreciate the advice. I’ll check in on the lawyer side of things.

Exactly. That’s why I always lead people to The ABA site for legal resources.

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