Outcome Based, Performance Based...
Posted by jgugliada
I am seeing more & more of this at every level. Work now, pay later. Really not comfortable with these models, especially for solo-preneurs, consultants etc. Time is your only asset & investing in one of these ventures is very risky.
I do think there are plenty of great examples of equity based deals that have worked great for all participants. But, I am more concerned today due to the economic & employment situation. Let's face it, at every level of business, there are folks looking to taking advantage of others.
There are many people out there today that might have a weak moment due to the business climate & agree to one of these outcome based projects. Many can include unpaid work for 6-10 months.
Unfortunately that's a lot of months for things to go wrong; many out of your control. Sales plan is off, finances are dwindling, delivery issues, partner issues etc. I can go on & on. And if this occurs four months into the project, not only have you invested the time (for which you get paid nothing), the project may just shut down in which you forego any chance of compensation based on "outcome"
Please be careful & use your very limited resources wisely.