explicitly so it's not left up to them to define how much of your time
is invested on an ongoing basis.
Likewise, you might want to specify a minimum hourly rate for
customization work so you can ensure that your 30% makes it worth the
effort. While they will want to make as much as possible on
customization, suppose they agree to a major undertaking for a client
and specify $50/hour for the work. Are you happy making $15/hour for
that effort? And who owns the rights to the new functionality? Can it
then be resold to others?
Ken
-----Original Message-----
From: Dave Phillips [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 11:26 AM
To: CF-Talk
Subject: RE: Question about Licensing my CF Web Application
Kenneth,
1 - There is nothing up front - this is a risk on my part as well,
however, I developed the application for my own use within my own
company, and so I never expected to have an opportunity to license it
and sell subscriptions to it. I don't have the time, nor the desire, to
do all the marketing, let alone end user support, so I'm pretty okay
without getting anything up front as long as I'm getting a fair deal on
the percentage.
2 - no hourly pay - I'm agreeing to keep the software up to date as part
of the agreement, however, it would be for a specific period of time,
not indefinitely.
3 - 30% on All Revenue of the company, period. so that would include
any customization charges they pass on to their customer (or an increase
in monthly subscription rate for that customization for example).
Thanks for your input.
Dave
________________________________
From: Kenneth Wilson [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 10:20 AM
To: CF-Talk
Subject: RE: Question about Licensing my CF Web Application
1) Are they paying you enough up front to make you happy in the event
they never sell it to anyone?
2) Are they paying you hourly for your support efforts or are you on the
hook to train them indefinitely regardless of their sales volume?
3) Is the 30% on customization work over and above what you charge to
do the work? Or do you just get 30% of whatever they choose to charge
for customization?
-----Original Message-----
From: Dave Phillips [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 11:05 AM
To: CF-Talk
Subject: Question about Licensing my CF Web Application
Hi all,
I have developed a web application and have found a company that is
wanting an exclusive license to manage, market, and sell subscriptions
to my web application for me. I'm comfortable with the arrangement, but
I'm unsure as to what to charge as a license fee.
I have gotten them to agree to allow me to earn a royalty based on a
percentage of the revenue they charge for each subscription. The number
that has been thrown out is 30%. So for example, if they sell a
subscription for $10 per month, I get $3 per month and they get the
rest.
I do not have to put up any money. I will be continuing to develop and
enhance the application as well as supporting it technically. However,
I will not be providing END USER support. I will provide support to the
company that is marketing it. They will deal with the end users.
I will also make myself available to customize the application for any
of their customers, however, I'm sure they will charge extra for this,
so in essence, I will get extra since I would get 30% of the revenue.
My questions are as follows:
1. Is 30% a fair amount? What's the standard?
2. Does it sound like a good deal to you? Is there anything I should
be asking for that I haven't mentioned?
3. Any other comments/suggestions?
Thanks for your input. I welcome it. This is the first time I've had
the privelege to do this, so I'm very excited, but want to be sure I do
it the right way.
Sincerely,
Dave Phillips
[EMAIL PROTECTED]
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