CaneWolf

Call me what you want, just sign the damn contract

Commission draws?

Hello savages,

I have an offer letter that has something I've never seen before. For the first quarter, there are commission "draws" that are basically guaranteed commission payments but those count against future commissions.

Anybody seen this before? Thoughts?

💰 Compensation

15 comments

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braintank

Politicker

Enterprise Account Executive

Yes, it's a recoverable draw. Fairly common.

Some people like them, some people don't.

Typically if you don't want it or need it, you can decline.

CaneWolf

Politicker

Call me what you want, just sign the damn contract

What would the value be in declining? Time Value of Money would say it’s better to get paid now but if I hurt accelerators or something, that would be a problem

braintank

Politicker

Enterprise Account Executive

In essence it's an advance on future commission so I suppose some people don't want to be "in the hole".

Sunbunny31

Politicker

Sr Sales Executive 🐰

I hate being "in the hole" and so declined recoverable draw whenever I had it.

CuriousFox

WR Officer

🦊

If the product is good and something you think you'd be successful with closing then take it. 🤷‍♀️

Pachacuti

Politicker

They call me Daddy, Sales Daddy

I have a non-recoverable draw against potential commissions in my first year. So either I get paid the draw -or- the commission.

poweredbycaffeine

WR Lieutenant

☕️

I was paid $18k in recoverable draws, kept it in an account, and when I left they never asked me to pay it back. Promptly spent it on dumb things instead of saving or paying bills.

UrAssIsSaaS

Arsonist

SaaS Eater

What do you mean count against future. commissions? Paying ramp like that is pretty normal but not sure what you mean by the other part.

CaneWolf

Politicker

Call me what you want, just sign the damn contract

If the payment was $5k, I wouldn’t get paid out on the first $5k in commission from actual sales.

UrAssIsSaaS

Arsonist

SaaS Eater

Got it. I think im failing to see the downside here assuming you are confident youll quickly get back into the green with deals closed.

CaneWolf

Politicker

Call me what you want, just sign the damn contract

That was my thing. I couldn’t see a downside but I had not seen it before either.

TennisandSales

Politicker

Head Of Sales

so this is not unheard of but not the norm.

the main problems with drawn is if you have to pay them back.

so if they are giving you all this money now but then all the commissions you earn going forward, go to pay back the draw then idk how great it is.

if you dont make as many sales as you though and it takes longer to pay back the draw then it could get mentally draining.

FOR ME I would not take a draw that I have to pay back. I will be much more satisfied with my work when I get paid commissions.....to my self. not to the company.

idk maybe its not a big deal but for me its a non starter.

I know other companies that have a draw every quarter and if you miss the number then it just gets added to next quarter....people just get so far in the hole that they never make any money haha

Diablo

Politicker

Sr. AE

I have not seen it before but based on what I understand from the comments - it's a NO for me. Living stress and debt free is the best policy.

Justatitle

Big Shot

Account Executive

very common and so you make money while pipeline is getting built.

SaaSam

Politicker

Account Executive

A bird in the hand is worth two in the bush. If inflation gets substantially worse then you come out on top by accepting the draw.

Personally, I don't like feeling like I have to pay something back so it would be a difficult decision to make.

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