Why We Offer Equity Partnerships

There is a structural problem in the way most B2B software is sold that nobody talks about because talking about it would undermine the business model. The problem is this: SaaS companies get paid regardless of whether you succeed. Your monthly subscription starts on day one and continues whether the product delivers ROI or sits unused. The vendor's financial incentive is to keep you subscribed, not to make you successful. Those two goals overlap sometimes, but they diverge more often than the industry wants to admit. Retention optimization and outcome optimization are not the same thing.

This is the principal-agent problem applied to software. The agent, your vendor, has different incentives than the principal, you. The vendor optimizes for revenue retention: reducing churn, increasing seat counts, upselling add-ons. You optimize for business outcomes: pipeline generated, meetings booked, revenue closed. When the vendor's retention metrics are healthy but your pipeline is not growing, the vendor has no financial reason to change anything. They are getting paid. The system is working for them. The misalignment is baked into the pricing model.

We built ProspectAI with a different model because we believe the misalignment is not just a philosophical problem. It is a practical one. When a vendor's revenue does not depend on your results, the quality of support degrades, the urgency of fixes decreases, and the prioritization of features tilts toward what retains the most customers rather than what produces the best outcomes. Aligned incentives are not a nice-to-have. They are the mechanism through which better outcomes are produced. The equity partnership model is our attempt to prove that.

The SaaS Incentive Problem

Monthly subscriptions create a specific set of perverse incentives that are worth examining in detail. The first is the feature treadmill. SaaS companies need to justify ongoing payments, which means shipping new features regularly. The pressure to ship creates features that are visible rather than valuable. A new dashboard, a new integration, a new analytics view. These additions look good in changelog emails and reduce cancellation rates, but they do not necessarily make the product better at its core job. The vendor is optimizing for perceived value, not delivered value, because perceived value is what prevents cancellation.

The second perverse incentive is support theater. In a subscription model, the cost of supporting a customer comes directly out of margin. Every hour of customer success time, every support ticket, every onboarding call is an expense with no direct revenue attached. The rational vendor minimizes support costs while maintaining the appearance of responsiveness. Chatbots instead of humans. Knowledge bases instead of consultations. Quarterly business reviews that review dashboards instead of diagnosing problems. The support looks sufficient. Whether it actually produces results is secondary to whether it prevents cancellation.

The third incentive is volume over quality. A SaaS company's revenue is a function of customer count times average revenue per customer. The easiest way to grow revenue is to acquire more customers, regardless of whether those customers are a good fit for the product. This creates a sales motion that optimizes for closing deals rather than qualifying them. Bad-fit customers sign up, fail to get results, churn after six months, and are replaced by new bad-fit customers. The SaaS company's revenue is stable. The individual customer's experience is poor. The model works for the vendor. It does not work for you.

Skin in the Game

Nassim Taleb's concept of skin in the game is the antidote to the principal-agent problem. When the person making decisions bears the consequences of those decisions, the quality of decisions improves dramatically. A surgeon who is also a patient makes different choices than a surgeon who never gets sick. A fund manager who invests their own money alongside clients makes different bets than one who collects fees regardless of performance. The principle is universal: alignment of consequences produces alignment of effort.

Applied to sales tools, skin in the game means that the vendor's return depends on your growth. When our revenue is tied to your pipeline growth, every decision we make is filtered through the question: does this actually help this company book more meetings? Feature prioritization changes because we build what produces outcomes, not what looks good in a demo. Support becomes proactive because a customer who is not getting results is a customer we are not getting paid by. Onboarding becomes rigorous because a poorly onboarded customer is a customer whose pipeline will not grow, which means our equity is worth less.

The relationship shifts from vendor-client to partner. This is not a marketing statement. It is a structural consequence of the incentive model. When we succeed only if you succeed, we behave differently. We challenge your ICP assumptions when they are wrong, even though it is uncomfortable, because wrong assumptions produce bad pipeline and bad pipeline hurts us both. We tell you when your messaging is not working, even if you like it, because ineffective messaging means fewer meetings and fewer meetings means less growth. The equity model creates a financial structure where honesty is more profitable than agreeableness. That is the point.

How the Equity Model Works

The practical mechanics are straightforward. Instead of paying a full monthly SaaS subscription, companies can trade a small equity stake for ProspectAI's full platform and services. The equity component is negotiated based on the company's stage, the scope of outbound needed, and the growth potential. The company pays less cash upfront. ProspectAI takes on more risk. Both sides are now aligned around the same outcome: growing the company's revenue.

This structure changes the economics in several important ways. First, it reduces the cash burden on early-stage companies. A startup that is spending carefully can preserve runway while still building a professional outbound system. The equity cost is real, but it is deferred and contingent on the company growing, which means it only becomes expensive if the partnership is successful. Paying equity on a company that is growing rapidly is a different proposition than paying cash on a company that is trying to figure out product-market fit.

Second, it creates genuine long-term alignment. A SaaS subscription can be cancelled monthly. The vendor has no incentive to think beyond the current billing cycle. An equity partnership creates a multi-year relationship where both sides benefit from sustained growth. ProspectAI's equity becomes more valuable as the company grows, which means we are incentivized to keep improving outcomes long after the initial setup is complete. There is no point at which we benefit from your stagnation. Our upside is directly and permanently tied to your upside. Explore the details on the equity partnership page.

When This Model Fits

The equity model is not for every company. It fits best in specific situations where the alignment benefits are highest and the cash savings are most meaningful. The first and most obvious fit is early-stage companies with more equity than cash. A seed-stage startup that has raised funding but needs to preserve runway for product development and hiring can trade a small equity position for a fully built outbound system. The alternative is spending thirty to fifty thousand dollars per year on tools, data, and an SDR hire, with no guarantee of results. The equity model shifts that risk to ProspectAI.

The second fit is high-growth companies that want aligned partners rather than interchangeable vendors. A Series A company that is growing rapidly and needs outbound to scale with them benefits from a partner who is financially motivated to keep up. A vendor on a monthly subscription has no incentive to proactively scale your system as your needs grow. A partner with equity has every incentive because your growth is their growth. This matters most during the critical scaling phase where outbound needs to expand from one channel to three, from one ICP to five, from one hundred emails per day to one thousand.

The third fit is companies that are tired of paying for tools that do not deliver. If you have cycled through three email automation platforms, two lead generation tools, and an SDR agency, all of which charged you monthly regardless of results, the equity model offers something different: a partner who does not get paid unless you get results. The frustration of paying for non-performance is real and widespread in B2B. The equity model directly addresses it by making non-performance equally costly for the vendor. Check our pricing page for comparisons between the subscription model and the equity model.

The Signal of Offering Equity

There is a meta-signal in the equity model that is worth noting. A company that offers to be paid in equity instead of cash is making a strong implicit claim: we are confident enough in our product to bet our revenue on your success. That confidence is itself informative. It is easy to charge a monthly fee because the fee is guaranteed regardless of outcome. It takes real conviction to say we will only get paid if you grow, because failure to deliver means failure to earn.

This is why the equity model functions as a trust mechanism independent of its financial properties. When a vendor says pay us monthly and we will try to help you, the trust burden is on the buyer. They must evaluate whether the vendor can deliver before committing money. When a vendor says give us equity and we will grow your pipeline, the trust burden shifts to the vendor. They have evaluated whether they can deliver and concluded that the answer is yes, strongly enough to stake their compensation on it. The willingness to accept outcome-dependent payment is the strongest possible proof of confidence. Visit our case studies to see what gives us that confidence.

Not every company should take equity deals. Not every vendor should offer them. The model works when the vendor has a track record of producing measurable outcomes, the customer has genuine growth potential, and both sides are committed to a long-term relationship. When those conditions are met, the equity model produces better outcomes than any subscription could, because the incentives are aligned at the structural level, not just at the rhetorical level. Aligned incentives are not a feature. They are the foundation that makes every feature work harder.

Beyond the Transaction

The deeper point is not about equity versus subscription. It is about what kind of relationship you want with the tools and partners that drive your revenue. The transactional model treats vendors as interchangeable utilities. You pay, they provide a service, the relationship is arm's length. The aligned model treats partners as stakeholders. They succeed when you succeed. They fail when you fail. The relationship is substantive. Neither model is universally correct. But in outbound, where the difference between a well-built system and a poorly built one is the difference between predictable pipeline and zero pipeline, alignment matters more than in almost any other category.

The SaaS industry has spent two decades normalizing the idea that paying for software regardless of results is acceptable. It is not. It is a compromise that exists because the alternative was difficult to structure. Equity partnerships, performance-based pricing, and outcome-dependent models are the natural evolution. They are harder to build businesses around because they require genuine confidence in your product. They are better for customers because they force the vendor to care about outcomes, not just retention. The companies that embrace aligned models will build stronger relationships, produce better results, and earn loyalty that no subscription renewal discount can match.

If you are evaluating outbound partners and the conversation is only about features and pricing, you are asking the wrong questions. Ask about incentives. Ask what happens when results are not there. Ask whether the vendor's revenue depends on your success or just your subscription. The answers will tell you more about the quality of the partnership than any demo or feature comparison ever could. The incentive structure is the strategy. Everything else is downstream.