I know, I know. There's just a very tiny slice of talent for which this is a good deal: if you can't make a business that generates, say, $40K in a year, this internship pays worse than most others. If you're able to do much better than that, though, the 10% revenue share seems pretty minor, when you could pay some of the upfront costs and get 100% instead.
It's the only software internship I've heard of with those terms, but in New York lots of startups looking for biz-dev interns will compensate like that.
Right. We would all be extremely disappointed if their work brought in just $40K in the next year. We have more paying work than we can get to at this point, and we're confident that we can do well for everyone with this arrangement.
If you have existing paying work that you're adding people to, it sounds more like you're in the staffing industry -- where paying someone 70% of what you're billing them out for is about the limit. I suppose you could argue that there's more uncertainty, but not enough to justify that big a difference.
I do like your company (when I was unemployed, Startuply was the only job board I liked checking), but I think this internship needs to be tweaked pretty seriously before it's a good deal for everyone involved.
Our thought with this was "come work with us for the summer, let's build cool stuff and make some money, and we'll pay you a piece of what you earn for 12 months rather than 3. We get help when that we can't pay for off the bat, and they get (1) cool work experience and (2) paid for a year.
We thought then and continue to feel that this is a fun, unorthodox, kinda risky and potentially very lucrative way for some college kids to spend the summer. There's nothing malign about our intentions, but we're resource-constrained enough that we have to be creative in our approach.
Just because it's a rev share rather than a flat fee, though, doesn't mean it's like the staffing industry. The staffing industry pays people below-market wages in return for letting them be entirely reactive about finding work. Our approach is to have interns share some risk in return for an upside that isn't capped.
If you're open to suggestions, here's how I would have done it:
1) offer a stipend. It's going to be modest, but you're a startup, so "We'll pay for your lunch, and give you enough money to rent a place with roommates," is enough.
2) Instead of ownership of revenue, give people ownership in the properties they create. Getting 10% of something questionable is okay, but being in charge of whatever new, successful lines of business you create is great.
3) Drop the '12 months' line. Tell people that you're looking for folks who can create good sites, and that if they can do it in a few months, you'll bring them on board full-time. A cut of revenue might be the right way to do things, but it makes you sound like an affiliate marketer masquerading as an internship, rather than an internship with a novel compensation scheme.
Interesting. We're trying to put together the cash for a reasonable stipend, and will if we can. We won't give equity for intern/contract type work; almost no one goes, for good reason. That being said, we'd love to be able to bring someone on full time after the summer, assuming things go well. The summer/12 months was designed to appeal to college students who compose the traditional intern market...
It's the only software internship I've heard of with those terms, but in New York lots of startups looking for biz-dev interns will compensate like that.