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Give him a trial run first. hire as a freelancer (no equity but pay them an hourly/flat fee). If he can get you a few paying customers using his contacts and sa
by codegeek 9y ago
Give him a trial run first. hire as a freelancer (no equity but pay them an hourly/flat fee). If he can get you a few paying customers using his contacts and sales skills, then you could consider giving equity/partnership of some sort.
The thing is that anyone can claim to be anything. You need to ensure that they can actually deliver. Don't give equity and then find out. Find out before you give equity. Remember, equity means they own a percentage of your company possibly for a really long time.
- tixocloud 9y agoWe're bootstrapped at the moment - what could we do as an alternative to an hourly rate/flat fee? I agree with your 2nd paragraph. That's what I'm worried about. Could we do something like vested equity? Where each deal we land will provide more equity? Or a sales commission of some sort?
- codegeek 9y agoEquity should always be vested. But I am not even sure if you should give them any equity until you know for sure that they are worth it. Even if he lands you 1 or 2 deals, how do you determine the equity (even if vested) just based on that ? I am just a stranger on the internet so take my advice with a grain of salt. Based on what you said so far, it seems like you don't know this person well and you don't know anything about their track record. That is a huge red flag for me to even discuss equity. Too early. If you are bootstrapped and money is tight, you could perhaps give him a commission on the first few sales (a fixed percentage of the sale per client etc) instead of equity. If he is really interested and worth it, he will agree. If not, then you are taking a big risk by agreeing on equity upfront without knowing anything about him and his ability to sell.
- tixocloud 9y agoThanks for the advice. I really appreciate it.