Why Agencies Can't Do Rev-Share Deals with Startups

It's all about risk. Many startups have either a non-existent or a non-proven business model. Why would they want to take the risk that they would never get paid?

A good friend of mine ran an SEO agency and had revenue-sharing relationships with a few companies. What ends up happening is that as soon as they start making real money, the company looks at the percentage of money the agency is getting as a liability (why should I be paying them this much??) and either wants to fire them (after the agency did all the work to get them the revenue) or pay them just a flat rate (which is typically much less than what the services are worth or what was being paid before).

So it's a lose-lose for the agency. It's much better just to charge for services.