Shared Revenue Models

As an advisor, I am frequently asked to advise on revenue sharing arrangements regarding partnerships between banks and fintechs. Based on my experience, there are a couple of key models commonly used in the fintech industry: 1. Fixed revenue share - while this model provides predictability, over time, it may not fully account for each party's contributions. For instance, Plaid may take a fixed percentage of the subscription fees earned by fintech apps that leverage their services. The benefit is simplicity however it lacks flexibility as market conditions change. That being said, parties should be free to renegotiate after a significant change in conditions. 2. Variable revenue share - this allows for a more equitable split based on performance, but can be more complex to implement. Payment processors may use a tiered revenue share model, taking a smaller percentage for high volume merchants and a higher percentage for lower volume ones. I think this approach incentivises both parties to maximize overall revenue. 3. Profit sharing or post cost revenue sharing - rather than revenue, the parties agree to split the net profits or revenue post certain expense. The major con with this model is that it requires robust accounting and auditing processes for transparency. 4. Hybrid approach - a combination of fixed and variable components, balancing stability and flexibility. This can be tailored to the specific needs and contributions of each party, though it may be more complex to design and manage. Choosing the revenue sharing model is obviously dependant on various factors such as parties’ bargaining power, market access, product ownership, platform ownership, pricing of the product, parties strategic goal, initial funding/ investment etc. It is therefore critical that all these factors are properly assessed before parties settle on a rev share model. As early stage companies navigate these complex negotiations, drawing on real-world industry examples can provide helpful context and guidance. #fintech#partnerships#corporatedevelopment#

The top 1% of consultants leverage a powerful psychological pricing trigger: "Pay me based on the results I generate for you." Revenue-share style agreements are more common in service businesses, but "gain sharing" might be the consulting industry's best-kept secret. Why it works: • Zero risk barrier removal: Clients won't face a downside if you fail to deliver. You've removed their biggest objection to hiring you • Skin in the game: It's a signal of extreme confidence in your abilities when you're willing to bet on yourself • Value alignment: Both parties are now focused on the same goal. Some of the most sophisticated players in the game understand that the highest fee potential comes from tying compensation directly to results. When you tie your compensation to performance, the upside potential dwarfs typical flat-fee arrangements. A percentage of significant growth can outperform even the highest monthly retainer. When you're both "eating what you kill" you're partners, not vendor and client. The focus shifts from "did they send the deliverables?" to "did we move the needle?" Honestly, most consultants run screaming from this model. They love the safety net of getting paid the same amount no matter what. Others don't have the confidence (or ability) to prove their work delivers. To pull it off, you need to: • Know exactly how to track ROI with zero ambiguity (dashboards are your best friend) • Set proper attribution and baselines at day one • Get comfortable with delayed gratification • Have enough cash to bridge the gap before the big paydays The paradox is the more you NEED the security of fixed fees, the less ready you are for the exponential upside of gain sharing. But the consultants who cracked the code make millions while everyone else debates hourly rates vs. retainers on Twitter. What's your pricing model? And more importantly: Would you bet on yourself?

After analyzing 1000+ campaigns this year, I'm seeing a fascinating shift nobody talks about. Direct advertisers are quietly moving from Cost-Per-Lead to Revenue Share models. Here's why: The data tells the story. We tracked performance across multiple verticals and found something unexpected: → Traditional CPL campaigns showed declining ROI → Revenue share models produced 40% higher lifetime value → Alignment between affiliates and advertisers improved dramatically The most interesting part? This isn't happening because advertisers want to pay more. It's happening because they're tired of paying for leads that don't convert. Here's what's driving the shift: - CPL models incentivize volume over quality - Revenue share naturally filters out poor performers - Long-term relationships flourish when both sides win I recently watched a major insurance advertiser transition their entire program. Initial affiliate resistance gave way to enthusiasm when top performers doubled their earnings. But here's the crucial part that most miss: The transition requires robust tracking and trust. Without proper attribution, revenue share falls apart fast. For advertisers considering the switch: → Start with a hybrid model to test performance → Ensure your tracking captures all conversion points → Be transparent with conversion data This isn't just a trend. It's a fundamental realignment of incentives that's reshaping our industry. Have you noticed this shift in your vertical? I'm curious to hear others' experiences. #affiliatemarketing #performancemarketing #revenueshare #directadvertisers

Agency Owners: When you're a fixed monthly cost, clients evaluate you differently. Every month, you're a line item on their P&L. An expense. A fixed cost they have to justify. Even if you're delivering results, there's always this question in the back of their mind: "Is this worth what we're paying?" When you switch to revenue share, the entire dynamic changes. Now you only make money when they make money. You're not an expense anymore. You're a profit partner. That shifts how they see you. Instead of evaluating whether you're worth the monthly fee, they're celebrating when you generate revenue because it means they're winning too. I used to do retainer plus small percentage of revenue. It worked fine. But there was always tension around that fixed cost. Clients would look at the retainer and think, "We're paying $15K a month. What did they do this month?" Even when we were crushing it, that fixed expense created pressure. Now we're 100% revenue share. And the conversations are completely different. Clients aren't stressed about paying us. They're excited when we close deals because it means they're making money. It's a better relationship, thanks to aligned incentives. The trade-off? You better be good at what you do. Because if you're not, you make zero dollars. But if you're confident in your ability to deliver, revenue share is the best model for long-term partnerships.

𝗥𝗲𝘃𝗲𝗻𝘂𝗲-𝘀𝗵𝗮𝗿𝗲 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀 𝗱𝗼𝗻’𝘁 𝗷𝘂𝘀𝘁 𝘀𝗽𝗿𝗲𝗮𝗱 𝗿𝗶𝘀𝗸. 𝗧𝗵𝗲𝘆 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝘃𝗶𝘀𝗶𝗼𝗻. In volatile markets, most brands buy support the same way they buy tools, fixed fees, fixed contracts, and fixed assumptions. But volatility doesn’t care about your assumptions. When demand slows, those contracts get heavier. When demand spikes, those contracts fall behind. We’ve seen it across hundreds of mid-market operators. The real problem isn’t uncertainty. It’s trying to scale with partners who aren’t built to flex with you. Revenue-share changes that. → It keeps incentives simple. → It aligns decisions with outcomes. → It forces both teams to build systems that can adapt in real time. Not “vendor speed.” Operator speed. Because when both sides win, only when the brand wins does something shift. Forecasts get sharper. Fulfillment gets tighter. The entire system becomes more honest. In our experience, the healthiest partnerships don’t remove pressure. They direct it. They create a shared pace, not a negotiated one. And in a market where every week looks different, alignment isn’t a strategy. It’s survival. ↳ As your brand grows, where do you feel misalignment first: in the plan or in the execution? #DTCGrowth #EcommerceLeadership #SharedSuccess #OperationalExcellence #SmartScaling

Rev share vs. Flat Retainer Marketing Agency Let's explore why a revenue share model can be beneficial for both marketing agencies and their clients. 1. Aligned Incentives  - We aim for $100k+ monthly revenue increases  - Our fee: 5-10% of net revenue increase  - Example: $500k increase = $25k-$50k for the agency 2. Focused Approach  - Optimizing all aspects of your business  - Concentrated attention on fewer clients (5-10 vs 40+) 3. Stronger Partnership  - You're a valued partner, not just an account  - Mutual growth: Your success directly impacts ours 4. Unlimited Potential  - No earnings cap, unlike flat retainers  - Encourages ongoing innovation and improvement Consider: This model requires trust and may involve more complex reporting, but it often leads to a more committed, results-driven partnership. #RevenueShare #BusinessGrowth #PerformanceMarketing

Revenue-Sharing Partnership – A Better Way for Businesses to Find the Right Marketing Partner? In 2025, after nearly 11 years in the game, IMP Marketing is shifting its business model. We're now a Revenue-Sharing Accelerator, helping e-commerce brands sell more in the US and Canadian markets. We’re moving away from the traditional agency model and transforming into a true growth partner – one that earns money based on performance. Instead of charging for KPIs like the number of social posts, keyword ranks, or ad budget managed, we get paid a percentage of the extra revenue we help generate. When our clients earn more, we earn more. As both a business owner and a casual investor, I truly believe this is a smarter, fairer way to work, especially in today’s tough business climate. More and more companies are cautious about spending on marketing unless there’s a clear path to ROI. And let’s be honest – if the agency makes money while the client loses money, that’s not a win-win relationship. At its core, marketing is about helping businesses sell. So in this partnership, we act as a sales engine for our clients: there's still a reasonable base fee, but the bulk of our income comes from “commission” based on the actual revenue we help bring in. By sharing both risks and rewards, this model motivates the marketing team (like IMP) and the client to aim higher and accelerate growth together. Sounds ideal, right? So why hasn’t this model gone mainstream yet? Because for a revenue-sharing relationship to work, many things need to align. Over the next few posts, I’ll be sharing what I’ve learned in five years of building partnerships this way, including: - What kinds of businesses this model works best for - The pros and cons of revenue-sharing - Real lessons from both wins and failures ... and more! Stay tuned! I’d love to hear your thoughts, questions, and feedback along the way.