If we were to share on revenues what would be the most fair percentage that I am entitled to?
To be honest it seems to me like your boss isn't really concerned with the concept "fair". You probably are from the goodness of your heart and because you feel for your company, just like I used to be for the companies I worked for.
I think this is a common problem for software developers like us. Most of the good software developers I know value fairness, adding value to the greater good and other concepts that matter. We do things with emotion and want to give purpose to our lives by being expressing our creativity.
At this point you should realize that being a CEO usually means having investors or feeling the pressure of money in some other way. His left ball is on the chopping block while he gives a warm smile to his employee's, hoping that they will make more money for him tomorrow.
The CEO watered down the idea and said it was not within what the company was doing.
What usually happens is exactly what you describe: the CEO doesn't understand the difference between value and money and you end up implementing it yourself.
Think back about the left ball of the guy that's still on the block. While he already feels the pain that it is chopped off (because he doesn't make the money he promised his investors), he realizes that you have something that can potentially solve his problem and notices that this might be the solution for his problem.
We are at a point of inflection as a company due to limited resources. Where restructuring is inevitable. The CEO is now receptive to the idea of a Revenue Share Agreement as we are in agreement that the business derived from the solution should be handled differently.
So from the goodness of your heart, you decide to help the company out and make a deal with him?
What's missing in the equation is how money is distributed throughout the company; for example, this CEO might have a salary per month of 10 times what you earn a year. Or perhaps the company has a huge loan from its investors and money flows away like that. If you're concerned with 'fairness', this is an important point IMO. Really, the situation the company is in, might have nothing to do with anything you described so far.
Sure you can think about what's fair and shares and so on - but I think you're in no position to negotiate with such a guy, while being the nice, fair and warm developer that cares about your coworkers, the company and the rest of the context.
I sympathize with you, so these are some other options I have for you that you probably haven't considered yet:
- Setup your own company. Make a contract with your current company that (exclusively?) licenses the software to them. You get a price X and allow them to make a margin of max 10 to 20% on the product (to make sure you don't compete with yourself). If it goes into the wrong direction, screw them and break the contract. Either way, you keep all the rights and protect your work (!)
- Setup a new venture and keep 51% of the shares in that. They can buy 49% of the shares of that venture for [give it a price, and don't be shy].
- Or don't just get shares but also the ability to have influence in the direction of the company. If your solution saves the company, I'd definitely try to get 50% of the shares and eventually accept 35% or something like that, without paying a penny for it ("you don't accept 50%? Fine, then I recommend you just use your other SIS product to keep the company alive.. oh wait... :-)").
I'd probably go for option 1, since it is the direction with most flexibility for you while protecting your work. The CEO feels the pain of his left ball on the chopping block, so remember you're in a strong position. If he doesn't take it, just walk away - he'll probably be back to renegotiate and give you another offer.