5 ms·

"Oh, I almost forgot: never work for equity. 99% of those projects will never go anywhere. I tell my clients that they’re welcome to throw in some free equity o

"Oh, I almost forgot: never work for equity. 99% of those projects will never go anywhere. I tell my clients that they’re welcome to throw in some free equity on top of my normal rates, but I get paid in cash for the work that I do. I have plenty of entrepreneurial projects of my own, so why would I work my ass off for 3% (or even 30%, though they never offer this much) of someone’s Facebook clone?" The most valuable paragraph in the whole article, IMO.

jacquesm 16y ago
That very much depends. If the equity is a part of the payment and you're a co-founder it is not rare to make out very well in the longer term. If a company is already established then equity (usually in the form of options) can be a substantial component of your compensation.
- rwhitman 16y ago
  Has this ever worked for you in the longer term? I mean from experience have you ever been paid out for taking an equity trade as a consultant? I'd really like to hear from someone who's made this work to their benefit
  - marknutter 16y ago
    My money is on "no."
    - jacquesm 16y ago
      Well, you'd be wrong then. Funny how you should know more about me than I do. The company meanwhile has grown in to something very respectable, and even though I haven't been a shareholder for years (bought out many years ago) I never regretted my decision one bit. It was an established business in a different trade when I got there, they decided to pursue this crazy idea (putting photographs on membership cards and print them with laser printers).
- willpower101 16y ago
  Yeah I don't get this either. I mean sure, you don't want to work for equity in something you don't care about. But I would LOVE to work for equity in some of the local start-ups around here. I don't mind giving my time for no up front compensation and in exchange growing a really awesome idea or prototype into a lucrative business with a viable exit! One of the biggest problems we are trying to solve right now is actually the problem of disconnect between business idea-generator types and programmers / engineers. I know too many programmers that are good, but don't have ideas. So they go work for big firms. At the same time I know many entrepreneurs who's only roadblock to funding is a technical partner. A coder is useless if he can't negotiate term sheets, get funding, and scale a business. Likewise an entrepreneur is useless if he can't code. I think matching these people up via equity is exactly what we need to be doing. Doesn't it suck watching a project you were paid 20 grand for rake in upper six figures going into the second year? I think that 5% equity is looking pre-tty good then.
rwhitman 16y ago
Also, don't discount your work for equity. Very not worth it. Learned this lesson twice now. Biggest reason - if a company is coming to you to build their whole product under a contract, they're making a major blunder out the gate. Any seasoned startup junkie will tell you that outsourcing early product development is a surefire pathway to failure. Don't be fooled by thinking your involvement will help turn them around, the motivations you have as a consultant differ greatly from the objectives of a startup. What ends up happening is you're working with a client who you're putting in way more effort and hours for - on a discount - which is, by the nature of the fact you're working on it, destined to fail. Get your normal fees on the project, define the boundaries between you and the company, and don't let yourself get sucked into their hype. No matter how high-profile or connected or wealthy the client is. Its not worth it.
deleted 16y ago
[deleted]
- deleted 16y ago
  [deleted]

jacquesm 16y ago

That very much depends. If the equity is a part of the payment and you're a co-founder it is not rare to make out very well in the longer term. If a company is already established then equity (usually in the form of options) can be a substantial component of your compensation.

rwhitman 16y ago
Has this ever worked for you in the longer term? I mean from experience have you ever been paid out for taking an equity trade as a consultant? I'd really like to hear from someone who's made this work to their benefit
- marknutter 16y ago
  My money is on "no."
  - jacquesm 16y ago
    Well, you'd be wrong then. Funny how you should know more about me than I do. The company meanwhile has grown in to something very respectable, and even though I haven't been a shareholder for years (bought out many years ago) I never regretted my decision one bit. It was an established business in a different trade when I got there, they decided to pursue this crazy idea (putting photographs on membership cards and print them with laser printers).
willpower101 16y ago
Yeah I don't get this either. I mean sure, you don't want to work for equity in something you don't care about. But I would LOVE to work for equity in some of the local start-ups around here. I don't mind giving my time for no up front compensation and in exchange growing a really awesome idea or prototype into a lucrative business with a viable exit! One of the biggest problems we are trying to solve right now is actually the problem of disconnect between business idea-generator types and programmers / engineers. I know too many programmers that are good, but don't have ideas. So they go work for big firms. At the same time I know many entrepreneurs who's only roadblock to funding is a technical partner. A coder is useless if he can't negotiate term sheets, get funding, and scale a business. Likewise an entrepreneur is useless if he can't code. I think matching these people up via equity is exactly what we need to be doing. Doesn't it suck watching a project you were paid 20 grand for rake in upper six figures going into the second year? I think that 5% equity is looking pre-tty good then.

rwhitman 16y ago

Also, don't discount your work for equity. Very not worth it. Learned this lesson twice now. Biggest reason - if a company is coming to you to build their whole product under a contract, they're making a major blunder out the gate. Any seasoned startup junkie will tell you that outsourcing early product development is a surefire pathway to failure. Don't be fooled by thinking your involvement will help turn them around, the motivations you have as a consultant differ greatly from the objectives of a startup. What ends up happening is you're working with a client who you're putting in way more effort and hours for - on a discount - which is, by the nature of the fact you're working on it, destined to fail. Get your normal fees on the project, define the boundaries between you and the company, and don't let yourself get sucked into their hype. No matter how high-profile or connected or wealthy the client is. Its not worth it.

deleted 16y ago

[deleted]

deleted 16y ago
[deleted]