Revenue share agreements: the terms to write down
What a revenue share agreement is, the eight terms it should settle, the mistakes that cause disputes, and how HYVV drafts and pays one.
A revenue share agreement gives someone a contractual right to a percentage of your company's revenue, usually until a cap is reached or a date passes. It is not ownership: the recipient gets income, not a stake in the company.
This guide is about the contract itself — what to settle before anyone signs. If you are still deciding between a revenue share and equity, start with revenue share vs equity. For how split structures and payouts work day to day, see business revenue splitting: how the math works.
When a revenue share agreement fits
- Rewarding early contributors before the company can pay full salaries.
- Partners whose work drives revenue, such as a sales or distribution partner.
- Advisors or affiliates who bring customers or deals.
- A joint product built with another company.
If someone is providing capital in exchange for a share of revenue, that is financing rather than compensation. Bring in counsel before you sign; it can raise securities questions.
The eight terms to settle
| Term | The question it answers |
|---|---|
| Revenue definition | Which revenue counts — gross or net, the whole company or one product, and which deductions? |
| Percentage | What share of that revenue, and does it ever change? |
| Cap | What is the most the recipient can ever be paid? |
| End date | When does sharing stop, even if the cap isn't reached? |
| Priority | If there are several shares and cash is short, who is paid first? |
| Payment timing | How often are payouts calculated and sent, and when does money reach the recipient's bank? |
| Reporting | How does the recipient see and check the numbers? |
| Buyout and termination | Can the company buy the share out, at what price, and what ends the agreement early? |
Revenue definition
Most disputes start here. "Revenue" can mean gross receipts, revenue after refunds and fees, or revenue from one product line. Pick one and write it down. Gross revenue received is the easiest to verify, because nobody has to agree on deductions later.
Percentage
A single percentage is easy to understand, calculate and audit. Tiered percentages — one rate up to a threshold and another above it — can reward growth, but they are harder to track and explain.
Cap and end date
A cap limits the total the company will ever pay. An end date limits how long the obligation runs. Most agreements should have at least one, and many have both, ending at whichever comes first.
Priority
When several people hold revenue shares, decide the order they are paid in. It only matters when cash is short, which is exactly when people check.
Payment timing
State how often payouts are calculated — on every payment, daily, weekly or monthly — and be clear that bank arrival follows the payment provider's own schedule.
Reporting
Give the recipient a way to see each payment, the percentage applied and what they were paid. Audit rights are easier to honor when the records already exist.
Buyout and termination
A buyout lets the company end the obligation by paying a set amount, often a multiple of recent payouts. Also cover what ends the agreement early — a breach, a sale of the company — and how disagreements are resolved.
Mistakes that cause disputes
A vague revenue definition. If the agreement just says "revenue", each side will read it the way that suits them.
No cap and no end date. A 10% share with neither is an open-ended claim on your top line.
Tracking it by hand. Spreadsheets drift, and the recipient can't check them. See the hidden cost of revenue sharing on spreadsheets.
Skipping the tax conversation. How payments are taxed and reported depends on who the recipient is and how the deal is structured. Agree up front who handles reporting, and ask a tax advisor.
How HYVV drafts and pays a revenue share
In HYVV, the revenue-share wizard walks through these terms, lets you preview and sign them, and attaches the share to its agreement in your company's Agreements. Documents are drafted from HYVV templates and the terms you set, signed inside HYVV, and stored with a SHA-256 fingerprint.
Once the share is created, it runs on its own:
- What it pays on. Each share is a percentage of gross revenue. HYVV only splits revenue that has settled in your Stripe account, and holds back any cash reserve you set before anything is split.
- Order and limits. Shares are paid in priority order until each reaches its dollar cap or end date. You can allow a buyout at 3× the share's average annual payout, or at the net present value of its expected remaining payouts.
- Timing. HYVV splits each payment the moment it clears in Stripe — or batches it daily, weekly or monthly on the schedule you choose. Stripe then pays each person out to their own bank on their Stripe payout schedule.
- Proof. Every payout gets a receipt that can be shared and verified by link. Every money movement is written to a hash-chained ledger that is re-verified every night, so any later change is detectable (tamper-evident).
Recipients connect their own Stripe account to be paid; until they do, their share is recorded but not sent. For someone outside the team, an Earn Link is a revenue-share deal anyone can review, sign and claim from one link.
No HYVV transaction fees on revenue you distribute. Stripe’s standard processing fees apply.HYVV pays every share on gross revenue with one percentage. If your deal needs tiers or a net or product-line base, the agreement can say so, but the automated payout will not calculate it — keep those deals simple, or pay them outside HYVV. The Agreements page covers how drafting and signing work, and setting up revenue sharing walks through the wizard step by step.