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Win, Lose, or Draw

I’ve gotten into two lengthy discussions recently about draw as a sales compensation component.  Specifically, since I work with start-ups, the questions were around whether or not you should offer up a draw or not as part of the compensation package.

I have some very strong opinions about draw, and I want to start by going over the basics.  Draw is compensation offered to a new salesperson coming on board.  There is a “draw period” which is the time over which the draw is paid.  (typically 3 to 6 months).  There are two types of draw: