A mentor of mine used to also point out this flaw with profit sharing:
What happens if (or when) the team grows?
For example, say there's a four man team - everyone's getting an even 25% profit sharing instead of any set payment. Everyone understands and assumes the risks involved. So far, no problem. The team sets up paperwork and every agrees to it. Later on, in production, the leader decides to bring in another artist due to heavy workload. Everyone's split just got smaller. What happens when this new person comes in way later in the project?
My point isn't that it's not fixable or there's not solutions but rather - it can get really messy, really fast.