Equity Share

[rafhelp]

I have developed several bespoke softwares and I have been looking for investors to help me market and promote the software. I know for a fact that in return most investors would then want a percentage of profits.

But the thing is in terms of profit in most other businesses there is production costs continously incurred then profits are calculated based on these figures. But with software, the software has already been developed and if it is distributed on the internet then there are no other major costs incurred. So would the profit share be based just on the sale amount?

Also in terms of work the author would still have to work on further developement, bug fixing and providing technical support so would he then take his 'service costs' out of the profits before sharing it?

Any other areas that need paying attention to with this sort of deal?

[figurewizard]

To be frank you will need the finished article: This means that the 'further development' and debugging you mention will have already been applied. Anyone you approach with an as yet unfinished product will be excessively cautious. Even if a deal were to be offered in the absence of this, it would not be a very attractive one.

Beyond this you will need it its marketing to be in place. That will probably mean having it featured on a website, preferably with live examples of how it works most especially by demonstrating its benefits to potential users. This is called: 'Showing them the goods' and for a potential investor is something that is just as important for the web as it is in any other form of business.

I wish you luck.

Joe.