I'm joining a software startup as a (co-founding) CTO. I am also bringing my industry contacts into the venture, and will be the only person taking initiative on business development. My contacts are the only initial customer prospects for the company. We won't have a separate sales/biz dev person joining the company for now.
I am told by the founder that I will be paid salary for executing my prime responsibilities as a CTO. But I will be paid only commission for any of my business development initiatives resulting in licensing and royalty revenue for our tech offerings. I am wondering how offers of such commissions are stated in the letter of employment, and what a fair offer is.
For example, if I clinch a customer deal resulting in $500,000 license fees for our technology, payable over two years, and the customer shares a certain (undetermined) amount of revenue from the sale of their product (with our technology) in the market on a periodic basis, (1) What is reasonable for me to expect as commission? (2) What is the typical schedule of payment of the commission? Does each periodic receipt of revenue from the customer trigger a corresponding installment of commisison payment?