JV payment structure - I want to pay someone for blog articles and give upside

by WSPcpa
10 replies
I'm going into a joint venture with someone and want to get some ideas of how to structure the payment. I want to retain the equity/ownership in the site but want to give him (a personal friend) some upside for writing blog posts. I'm building a course, will be designing/marketing, and will be paying all fees and want to hand off a lot of the blog content creation. I am thinking of using these terms but it is a little complex and would include both:

Part 1(Flat rate): $15 per article - from the future earnings of the site (so site makes $0 he makes $0). I am also putting the course on udemy so will give him payout from there until he is paid up if the site doesn't get any/enough sales.
Part 2 (Upside): For every article written (assuming ~500 words), extend a royalty rate of 35% by 2 weeks from launch of the course. So he makes 50 blog posts he gets 35% of sales for 100 weeks or roughly 2 years.
#articles #blog #give #pay #payment #structure #upside
  • Profile picture of the author marciayudkin
    I don't know why anyone who had other options would enter into this kind of agreement with you unless they knew you well and you had an impressive no-lose track record.

    Then again, I don't know anyone who would consider $15 for an original 500-word article even in the ballpark of reasonable pay.

    Marcia Yudkin
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    • Profile picture of the author WSPcpa
      Originally Posted by marciayudkin View Post

      I don't know why anyone who had other options would enter into this kind of agreement with you unless they knew you well and you had an impressive no-lose track record.

      Then again, I don't know anyone who would consider $15 for an original 500-word article even in the ballpark of reasonable pay.

      Marcia Yudkin
      This is a good friend of mine who does not currently write for a living, this would just be on top of his full time job. I have had a success with $15 per article - however the point is that there would be significant upside.

      Do you have anything constructive to offer, like a better way to structure the terms?
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      • Profile picture of the author angiecolee
        Just because it wasn't what you wanted to hear doesn't mean it wasn't constructive.
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  • Profile picture of the author marciayudkin
    Just because it wasn't what you wanted to hear doesn't mean it wasn't constructive.
    Right. The question is like asking, "I'd like to pay the guy who's building me a new roof $2 an hour plus a little bonus. What do you recommend for the bonus?"

    Sweetening a lousy deal with a sprinkle of sugar still keeps it a lousy deal.

    And the fact that someone, somewhere, is desperate enough to accept the deal doesn't make it a reasonable deal.

    At the very least, I hope this thread makes you question the abilities of someone willing to work under the conditions you described.

    Marcia Yudkin
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    • Profile picture of the author WSPcpa
      Originally Posted by marciayudkin View Post

      Right. The question is like asking, "I'd like to pay the guy who's building me a new roof $2 an hour plus a little bonus. What do you recommend for the bonus?"

      Sweetening a lousy deal with a sprinkle of sugar still keeps it a lousy deal.

      And the fact that someone, somewhere, is desperate enough to accept the deal doesn't make it a reasonable deal.

      At the very least, I hope this thread makes you question the abilities of someone willing to work under the conditions you described.

      Marcia Yudkin
      This is not a professional writer. This guy works in real estate and was interested in a side job with some upside. $15 was a starting point for discussions sake since I had a writer in the past who put out great quality, apparently it offended the hell out of you. With the royalties could potentially be $100+ per article. Potentially is obviously key.

      You're caught up in the per article rate... maybe i'll raise it maybe not, but the more I'd raise the rate the less upside I would allow for, obviously.

      To look at it in a different perspective, if I were to give him 50% of the company plus the $15 per article, would you still think that it is a lousy deal? What about $1 per article, or $0? He would be an equity partner so why pay him? The point I'm trying to make it that the upside royalty potential should not be looked at as some small "bonus" on top of a shitty deal.
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      • Profile picture of the author angiecolee
        Originally Posted by WSPcpa View Post

        This is not a professional writer. This guy works in real estate and was interested in a side job with some upside. $15 was a starting point for discussions sake since I had a writer in the past who put out great quality, apparently it offended the hell out of you. With the royalties could potentially be $100+ per article. Potentially is obviously key.

        You're caught up in the per article rate... maybe i'll raise it maybe not, but the more I'd raise the rate the less upside I would allow for, obviously.

        To look at it in a different perspective, if I were to give him 50% of the company plus the $15 per article, would you still think that it is a lousy deal? What about $1 per article, or $0? He would be an equity partner so why pay him? The point I'm trying to make it that the upside royalty potential should not be looked at as some small "bonus" on top of a shitty deal.
        The only one here who appears to be super offended is you.

        You have posed a question to pros. You're surprised at a pro who took time out of her day to say "I don't know anyone who'd work for that".

        Notice you don't have a metric ton of other replies. I don't know what your PM situation is looking like on this topic, but generally a lack of response is telling.

        Rookies may tell you it sounds reasonable. Pros probably won't. Even if the guy is an amateur and has a day job.

        You'd be better off asking your buddy if that's an acceptable deal.
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  • Profile picture of the author 1Bryan
    There's 2 parties to the deal - you and your friend. What anyone here thinks of the deal doesn't matter. What works for both of you is what matters.

    I've worked out a lot of deals with writers. Deals that probably Marcia would hate. But they worked out well for me and the writer. And that's all that matters.

    The world's filled with pundits commentating on everything from sports to politics to celebrities, etc.

    No need for pundits to opine about a deal between you and your friend.

    Does that help?
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    • Profile picture of the author WSPcpa
      Originally Posted by 1Bryan View Post

      There's 2 parties to the deal - you and your friend. What anyone here thinks of the deal doesn't matter. What works for both of you is what matters.

      I've worked out a lot of deals with writers. Deals that probably Marcia would hate. But they worked out well for me and the writer. And that's all that matters.

      The world's filled with pundits commentating on everything from sports to politics to celebrities, etc.

      No need for pundits to opine about a deal between you and your friend.

      Does that help?
      Thanks Bryan - yeah I think my goal with this posting was to come up with ways I hadn't thought of to structure the terms to be advantageous to both parties. I discussed with my friend and he liked the idea and wanted to think about how much time he could commit.

      If anyone is reading this and is interested in some sort of partnership, PM me and maybe we can work out possibly better terms depending on your experiences.

      FYI the #2 leader in this space (which is a paid course on a non-technical subject) has 486k organic monthly US traffic with only 79 backlinks (per SEMRush analysis) - which is why I think the upside is large.
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  • Profile picture of the author Whitney Segura
    I have done a great deal of this type of business model in the past, and the way I went about doing it was this:

    The copywriter produces their own content, and they get 50% of the income from adwords/other PPC campaigns I might be employing, in addition to any referrals generated via affiliate offers.

    I had no problems whatsoever getting plenty of people on board, I am not willing to shell out $15 to post an article, that might not get any views / earnings.
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  • Profile picture of the author Sarah Harvey
    Actually paying $15 for an article is decent if you are paying the national minimum wage here in the UK. That means $15 is for one hour's worth of work. And in one hour someone can either write a decent article if they are provided with all the necessary groundwork like research or they can research the article before hunkering down and actually attempt to write it.

    National min wage is £7.20 all across the UK and that is standard. You are not allowed to pay less and can be taken to court if you do. So convert that into dollars and you can certainly pay that for an hour's worth of work.

    Elsewhere, I assume you will get people who are happy to work for less than $15 but I am just illustrating that in some countries, people who are poor will all too happily work for $15 an hour.
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