Although I think that it ultimately boils down to the unique agreement between the parties involved, I think this does raise interesting questions as to the risk for reward element to structuring a "proper" contract and if this really is the ideal model for imposing of this relationship at all. Although maybe a stretch to think, that to some the risk as value is defined differently by each party. If as a result of the work of a good programmer, an investor improves and clarifies his trading strat, which makes him a better investor 10 fold, how do you value that? and vice versa, if a programmer becomes a better investor and programmer, which allows him better paying opportunities, how does he compensate for that?
However, this might over complicate things.
I would head in the direction of arranging a reward structure where the programmer would get paid once for his services rendered, plus a bonus equity amount that is tied to the performance of each algo programmed well. That way, his interests and the investors interests are more aligned.
However, this might over complicate things.
I would head in the direction of arranging a reward structure where the programmer would get paid once for his services rendered, plus a bonus equity amount that is tied to the performance of each algo programmed well. That way, his interests and the investors interests are more aligned.