Free app development in exchange for revenue share on a zero-budget project: What should the contract look like?

The git repo, cloud infrastructure accounts, and app store developer accounts absolutely must be set up under your name. Add a clause requiring full documentation of all third-party dependencies and open-source licenses as they code, so you aren't forced to rebuild from scratch if someone else takes over down the line.

The dev will put your project on the back burner the second a paid gig comes along 3 months in. Loss of motivation is the single biggest failure point in sweat-equity deals. If you don't include clear termination and code-handover terms for every delayed month, you're going to waste a whole year.

We tried a 20% cut on gross revenue for a similar delivery app. Once credit card processing fees and server costs were paid, our remaining margin went straight to zero. If you do a revenue-share model, the only metric that makes sense is net operating income after all direct operational expenses are deducted.

Under German IP law, the developer's copyright cannot be transferred, but usage rights (Nutzungsrechte) can be granted to your company exclusively and without limitation. You must clearly state in the contract that this right is worldwide, perpetual, and sublicensable.

Add a buyout option to the agreement. For instance, include a clause stating 'The company may, at its discretion, buy out the developer's share in cash based on a specified multiple or valuation.' If an investor comes along later, this share will become dead weight.

did u guys discuss who pays for server bills and map api fees? dev says the code is free but dont be surprised when infrastructure runs into hundreds of euros a month, budget for that from the start.

Exactly how long is the developer committing to deliver the first working prototype? Have you discussed putting a clear deadline and app store approval requirement in the contract?

Two years ago we made a deal with a developer who came to us with the exact same offer. He shipped the first version, but as the restaurants gave feedback, he stopped pushing updates. Since he had the source code we couldn't bring in another developer either; in the end we had to scrap the project and lost 25 restaurants. Don't let anyone write a single line of code without a contract.

edit: fixed a few typos.

Thanks for posting. People defend habits not processes. Resistance comes from there.

We've heard this a lot, but it never happened like that for us. People defend habits, not processes. Resistance comes from there.

Hasty decisions become decisions you have to fix six months later. If you post the result here, it will help others too.

Let me share what happened to me; it might be useful. The real issue isn't the number, but what it's based on.

Do a small three-month project before talking stocks, so you see each other. Good luck with that.

im a small business let me explain from my side but do a small three-month project before talking stocks so you see each other.

taking notes for two weeks yields better results than a six-month estimate... honestly i'm also curious if anyone does it differently.

Let me clarify the technical side. The only thing separating friendship from partnership is a written contract.

Solutions that work at a small scale collapse when you grow; I learned this late.

We need to take it step by step. Solutions that work at a small scale collapse when you grow; I learned this late.

If I were you, I'd go this route.

i didnt know that then dont hesitate to ask; those who dont ask always pay more.

corect me if I'm wrong.

Exactly like that. If decision-making authority isn't defined, it causes daily issues, not just during exits.

The answer varies greatly by industry; there is no one-size-fits-all rule. Proven by experience.

exactly, and not many people know this and i mean most time waste accumulates in tasks waiting for approval.

corrrect me if Im wrong.

heres how it went for us and just because everyone does it doesnt mean its right.