Got in touch with a sales person and my dev team has developed an app for a SaaS product. We decided that my company will handle the tech and his company will handle the sales and marketing.
Now they are asking us for:
1) Ownership of app because no investor will touch them if the app is licensed and not owned by their company.
2) Exclusivity i.e. my company cannot sell this app to anyone else because they don’t want competitors in the market in the future.
3) Vetting rights i.e. we have to ask them for permission every time one of our customers wants something similar. They will agree to its use only if our customer is not a direct threat to their company.
We are talking about revenue share (20% tech and 80% sales since sales is a bigger cost than tech, app is already developed by us at a very minimal cost and maintenance is not a big cost as per them), a straight development cost or a mix of both . I am willing to go as far as co-ownership, nothing else beyond that. They wanted this in a co-owned entity but I don’t want their expenses on my head.
Are their concerns valid? Is their a middle ground where we both could agree upon?