calydon

I've been laying some groundwork for a website that I got started on with the understanding (although I may have 'misunderstood') that I was entering into a partnership agreement for 20% of equity. This seemed like a good deal because the principal is assuming most of the risk and they have the experience to get the product line we're selling. Something I could never do. My role is tech.

I know the principals well (they are blood relatives) and so I had no trust issues.

Now that we're ready to really to start grinding into the main part of the work I have not yet seen the articles of incorporation, so I don't know if I'm on the board, and have 20% of shares or not. I asked for a written agreement between us before we go further.

Today I got an email from the principals saying they will sign a 'join statement' to the effect that I will get "20% of all profits from all online sales or sales that are driven by the use of the website".

Have you heard of anything like this? At first I thought it's a bad deal, but then I realized it needs a lot more information for me to make that determination. For example, am I an employee who has to work a certain number of hours to earn that 20%? How are 'profits' defined? Is it even wise for any business to sink 20% of their profits into a single 'individual'? I guess I'm not a partner so I can't call myself that.

What should I come back with in terms of questions and responses?