This is the page for people who want to check the working before they talk to anyone. Nothing here is held back for a call.
Every figure on this page is illustrative — a worked example to show the shape of the mechanism. Your numbers get worked out with you, in the open, and only once we both think there's something worth building.
I price the build at fair-market replacement cost: what a competent shop would actually charge you to build the same thing. I do that before I estimate my own time, deliberately — pricing it on my speed would hand you my efficiency for free, and pricing it on my time would punish you for my being fast.
You don't pay that number in cash. It becomes a balance, and the balance is recovered from an agreed share of revenue. When the balance reaches zero, the recovery stops permanently. If revenue never arrives, nothing is owed.
The balance is the build price plus a risk margin, agreed up front. That margin exists because I'm carrying the risk of never being repaid at all — and critically, it is a cap, not an interest rate. I get that number and not a dollar more, however well it goes. Repaying it faster is better for you and still fine for me, which is the right way round.
The outstanding balance stays under about one year of your projected revenue. Past that, a revenue sweep stops being recovery and starts eating the capital that generates the revenue in the first place. If a build is bigger than that, it should be paid in cash — not turned into a larger balance.
Once the build is repaid, an ongoing royalty on topline continues. Think of it the way a franchise works — an ongoing percentage for an ongoing platform — rather than as a loan. For reference, franchise royalties typically run in the mid single digits of gross; McDonald's is around four to five percent.
That royalty is what makes the front half economic. It's why I can price the build at replacement cost instead of a premium, and why I'd rather give you more of the stack than less.
If someone buys the company or you raise, the royalty is bought out at a formula we agree at the start. I expect that to happen, and it's the outcome I'm aiming for — not something I'd resist.
Invented numbers, chosen to be round. Not a quote, not a benchmark, and not drawn from any real deal.
The risk margin is scored per deal against how likely the money is to come back at all — how proven the money model is, how much of the selling depends on me rather than you, how long the return takes, and what's recoverable if it doesn't work. A de-risked venture gets a lower margin. That is deliberate: closing those gaps before we build costs you nothing and makes the deal cheaper.
All of the above is about the venture. But before I score any of it, there's a question I answer first — and if the answer is no, I never get to the arithmetic at all. It isn't a scored thing. It's a judgement, and these are the four parts of it:
Do you think honestly about your own idea? When we find a real problem with it, do you update — or defend?
Do you do the work between conversations? The research step is the test, and it's a fair one.
Will you actually sell it? I'm paid only from landed revenue, so somebody has to do the commercial half and it isn't going to be me.
Would I choose to work with you for the length of the build? I'm deeply involved while it's being built. This isn't a passive position.
A no on any of them isn't a verdict on your idea, and I won't dress it up as one. It just means this particular arrangement isn't the right one — which sometimes means a straightforward cash engagement instead, and sometimes means nothing at all.
What it is, where it's stuck, and what you've already spent trying to get it built. I'll tell you honestly what I think — including if I think you shouldn't build it, or shouldn't build it with me. Most of these conversations end there, and that's fine.
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