Bootstrapped startup commission-only role, bad idea, right?

Question

As I type this out, I pretty much already know the answer, just double checking with the fine folks here.

Earlier this week I had a CEO from a bootstrapped startup reach out to me. She was looking for someone to help her company close deals. We chatted over the phone about the details, and supposedly they do software development in the mid-sized enterprise space, all deals are a minimum $1 million, deal cycles 6-8 months or more (for obvious reasons). They have no issue with lead generation and have plenty of opportunities, but they struggle converting (I wanted to dig more into this and will), and need someone with closing experience to help them out, they have some they are working with already, but need more.

The role would be commission-only, with the percentage to be negotiated once we agree to work together, and a base salary to come along later once I've "proven myself."

This was a preliminary intro call, and we have a follow up set for this week where I can probe further on a lot of the questions I have, but obviously I have concerns and doubts that this is worth pursuing further. Of course I'd love to make a hefty commission, but I'm not in a financial position where I can just go 6+ months without pay, and I don't know how sustainable it would be to work another job to meet expenses and work these deals. I know a lot of people work 2 full time jobs or 70+ hours a week, but it just seems like something will fall through the cracks. Also, this job would require travel to company sites (which they would pay for) which would mean I'd be taking time away from whatever job I was doing (even if a gig job like Uber). And then there's the worry that I'd land a deal but get cheated out of the commission.

So, I'm very much leaning towards thinking this is a dud. I know some people have mentioned meeting with CEOs or VPs at startups for interviews that ended up being more GTM strategy sessions that resulted in no actual job opportunity, but consults under the guise of interviewing. Not sure if that's the case here, but either way I'm not certain this is a good role at all for me. Also interested in hearing if anyone else has had CEOs reach out to them for these kinds of "opportunities."

Accepted Answer

You're leaning right. This doesn't feel legit, even if it is. They have no problems in generating leads but can not close? Which space is this solution operating in? I mean, which sector? No base just commissions? Even if I trust myself to be the best sales person ever but still wouldn't take a job which has no base.

Plus it has travel involved, how would you even manage that. I'm not fully convinced with this, but still your call.

Answer

This stinks to high heaven.

Answer

I would be very skeptical of this. Having worked at a startup I can tell you how absolutely terrible it is trying to sell against legacy businesses in the early stage.

Answer

Where is the company based out of?

Answer

It’s high risk / high reward. If you can afford to go 10-12 months without a real paycheck - go for it.  But you can’t (as you said) so I would pass on it.

Answer

It’s a no from me, dawg. Trust your gut

Answer

I'd rather hit the unemployment line.

Answer

Heck no. They’ve got million dollar deals and leads pouring in but they can’t pay you a base? Sham

Answer

This does not sound like a good deal.

Answer

Firstly, there’s very sound advice from the comments here, and some great perspectives.I founded (and sold) a SaaS business myself and in the early days my CTO pushed hard for us to take on a bunch of commission only sales people with high % deals. At the time I made sure I heard him out, and his reasoning, before saying no. Usually these suggestions come from people who have no experience of sales or respect for the professionalism and unique expertise of sales people. To offer commission only without any other compensation is derisory and disrespectful. At the time I suggested to him that we offer out all our software dev roles on a success fee, meaning they only got paid when the code was successfully released and proven to be good. He freaked out at the suggestion and spent a lot of time and effort explaining to me why good devs are valuable, the vast knowledge and experience they bring and how hard it is to find and hire the good ones. Exactly, and the same applies to sales people.The ONLY time I’d consider this would be if I was sat on 2 years of cash and the founders had sold me on the business idea and market research in fine detail. Then I’d decide whether to agree commission only but also including vested equity based on time spent.Your free time is far better spent finding the right role in a more established business that is willing and able to pay your worth. If they can’t pay any salary it doesn’t bode well for getting those commission payments on time, if at all, without paying legal costs to recover your money (if they even have it). This deal never ends well.Lastly, the founders should always be great closers, they know the business and the market better than anyone. If closing leads is a problem, then it’s more likely in this case that the issue is with market fit and/or product.Steer well clear and have faith in yourself. Lots of very talented people out there will tell you stories of their last job search taking 12-18 months full time. Persevere, and when you find your next role just stash cash as much as you can in case you get laid off again, and never stop looking for your next move, even if you’re happy. Good luck!

Answer

Work for free for 6-8 months? Seriously? NFW on that one! Looks like ERP SW that probably has either complex implementation or PoC requirements. If that is the case, there is NO guarantee that the buyer will end up placing a PO at the end of the cycle. That is probably why they are having a tough time closing.

Answer

Run, run faster than the time that would win you a gold medal

Answer

So they just expect you to work for free for 6-8 months until the first conversion? Or do they plan to bring you in on existing pipeline?

Answer

Negotiate a 50/50 comp plan or walk away.

Answer

At worst it's predatory hiring, and at best their leadership absolutely has no idea how to run a business.

Space_Ghost20

Bootstrapped startup commission-only role, bad idea, right?

23 comments

Space_Ghost20

Bootstrapped startup commission-only role, bad idea, right?

23 comments

Related posts

I just quit my job after 3+ years of buying the dream "tHiS rOle WiLl bE gReaT foR yOur dEveLopMenT"... Feels good so just thought I'd share

If you join a SaaS company and thrive at the beginning due to inbound leads and good SDR and then sales start going down due to a change of SDR and less inbounds, does that mean you’re not a competent sales person or does it mean it’s time to move on to another company?

Hey WR fam, I’ve been navigating the job market for the past 8 months after being laid off, and I could really use your valuable insights and advice. I have just under a year of experience being an AE at a logistics company, I’m looking into software sales but no luck. Any feedback? Thank you.