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Management What percent of the profit should each team member get?

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Imagine there's a team of 4, consisting of an investor, a coder, a graphics designer, and a sound designer. What percentage of the end profit should each person get?

What if there was another guy for 3d modeling?

And what if there was multiple guys doing one part of the job, would they collectively get the percentage that that job gets? I mean, imagine there is 1 investor, 1 graphics designer, 1 sound designer but 3 coders. If 1 coder (like in question 1) would get 25%, would this number be divided among all the coders, or will the number rise?

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The investor pays their wages and takes 100% of the profit.
Or if the investor is paying less, e.g. 50% of wages, then the staff collectively get 50% of the profit. The profit per person is their amount of foregone wages divided by the total amount.

Then the question becomes: what wage is each staff member worth? You also have to deal with performance reviews. If your coders tell you that a particular feature took 1000 hours, that means that they're owed 1000*wage, which is going to be a lot of money... But maybe that feature only should have taken them 10 hours? This is where you need an experienced producer / project manager who can keep an eye on value and performance... One way to deal with that is to estimate the duration of every task, get everyone to agree on the estimates, and assign value based on the estimated time instead of the actual time. Then the total costs are known up-front to avoid disputes... That can go wrong when the estimates are wrong though, and you end up over-paying, or tasks simply aren't completed because the actual is higher than the estimate, making it not worthwhile to complete. It's also not flexible - game design is very agile, iterative, reactive, whereas this level of pre-planning is very static.

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I'm a coder, and I was promised regular paycheck (not too high though, but good enough for my level of expertise), and a share in final profit. Although i see that the company is very poorly managed, and I'm not confident in the project ever kicking off. And now based on what you guys say, i see that i better either ask for a higher pay and no share, or just quit this place. Thanks anyways guys.

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If the investor is paying the wages then the investor would expect to get the majority of the revenue, to refund what they spent on wages. Beyond that, they may well expect the majority of the profit as well, because they took on all the risk.

Beyond that, there's no right answer for what share you should get. There's whatever you agreed to, and if there is no agreement, it's down to what you negotiate.

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This company has a web dev, and an android dev too, and i just found out that they respectively haven't been paid in 5 and 3 months. Gonna quit today!

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Welcome to the startup world. ;)  It's quite common for the money to run out and for people to not get paid, so you need to be very confident that the future prospects are good enough to cancel that out. I suspect that's not the case here!

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Oh that's so not the case here. The thing that really hurts about this company is that they proudly claim to have been in business for 10+ years on their web page. Besides, the guy is extremely rich! And each 2 weeks, he signs a new contract with at least 3 new clients! Money is not the issue with this guy, he's just really really cheap, with bad managerial skills. Gotta make a rant about him on devRant.

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Gonna quit today!

Find another job first.  

It is generally far easier to find a job when you have an income and other benefits.  

If you quit first then you have no income to support you while you look.  Sometimes the desperation is helpful, as is the ability to look for work all the time, but usually it is far more painful.

Also if you quit but aren't fired or laid off, you generally aren't eligible for unemployment insurance payouts or various types of welfare money/services.

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What percent of the profit should each team member get?


Because your post topic sounds like a lot of posts we get from guys who want to start a "company" without paying people until the game launches, anyone would think this thread belongs in Business And Law. But you're not the entrepreneur yourself; you're asking if you're getting a fair share, which makes me think this thread belongs in Game Industry Job Advice.

Gotta make a rant about him on devRant.


I'd hold off on that. He can sue you. If what you say is all true and you can prove it in court, you can win the suit, but going to court as a defendant is a lot of trouble you don't need. Instead, consider if you have evidence to take him to court for back wages. Leaving this thread in Business And Law.

Gonna quit today!

Find another job first.


Assuming the OP (simmorsal) is actually getting paid.

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We were 3 people that started this week, and we all quit yesterday, and the remaining 2 employees will leave next week too when their contracts ends.

It was my first real job as dev, and I'm not pleased! Hope it changes.

Gotta make a rant about him on devRant.

I'd hold off on that.

They guy won't even check up on his employees, let alone devRant!

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We were 3 people that started this week, and we all quit yesterday, and the remaining 2 employees will leave next week too when their contracts ends.

It was my first real job as dev, and I'm not pleased! Hope it changes.
 

 

Gotta make a rant about him on devRant.

I'd hold off on that.

They guy won't even check up on his employees, let alone devRant!

 

Taking freelance work is always risk. Try to get them to pay you before you release their code. e.g.
You release the first week of work for free.
Then you release each week of work you have done AFTER receiving that wage.
That way whoever is paying you recieves a week of work from you for nothing and so are effectively paying you one week behind. It carries a risk you might not get the final payment, but it sure better than having 3-5 months unpaid! This method carries some risk though (i.e. One week of unpaid work at the start or end).
Anyway, I just started out in freelancing proper and have stuck to this mantra and will do outside of long-established and reliable companies and thus far it works ok.

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Mats1's advice seems quite sensible and makes it safer for you to ensure you do get paid indeed. Maybe it's a process that can be agreed upon in the contract, to ensure you cannot get in trouble  for doing it. 

Regarding the way the profit is shared, it all depends on how the company was setup in the first place, and what percentage of profit you managed to negotiate when starting the work. There are some formats often used when there are multiple founders, but then there are no rules on how to set them up. It's really all about negotiation.

And then there is the question of what is actually considered "profit", as there are a lot of ways of managing finances to ensure that there are no actual profit, like investing all the revenues into R&D, or into other product developments etc... which shows, in the end, that all the money that was earned was spent, and therefore, that nothing is left to split.

Overall, when it comes to contracts, pay, shares, revenues, profits and the like, if you're not sure you understand all the terms of the contracts, it's a good idea to check with a qualified lawyer to ensure you know what to expect, and what you're due.

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