We are a SaaS company. A larger partner of ours who sells a complimentary product wants to have their sales reps sell our product alongside theirs. They want 25-50% of the first year’s revenue. Should we do it?

Yes, probably.

The simplest way to think of payments to partners is as a marketing cost.
The reality is, it’s tough to acquire a good customer for < 20%-25% of your first year ACV anyway. So anything in this range is a good deal viewed as a marketing program.
What is much harder is when partners want an annuity, a piece of later years. If possible, avoid that.

If you keep a customer for 10 years, paying 25% of Year 1 to a partner is … nothing.

The tough part ends up not being the 20%-25% to the partner. The tough parts are:

Double commission. You’ll probably also have to pay your own reps a commission to avoid channel conflict issues. This will double the cost, effectively. But it’s OK.
Dubious credit. Some partners want credit for customers where they really didn’t create the lead or relationship. This is super frustrating. But, Shopify, Apple and Salesforce charge everyone 20%-30%+, and they take revenue from every year, not just Year 1. So get a bit zen. If a partner gives you access, it’s not the end of the world to pay for it.

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