Many partnership agreements have time-based equity. In the case of YC-related companies, full equity doesn't come into fruition for 4 years. The equity grows ov

Many partnership agreements have time-based equity. In the case of YC-related companies, full equity doesn't come into fruition for 4 years. The equity grows over time and usually requires a minimum 1-year commitment for any equity stake. In your case, you guys didn't think this part completely through (oh well, move on). I suggest you talk with the previous programmer. It's more than likely he doesn't see any value in his equity and may be willing to give it up completely or for a small return. If he wants a return for his effort, you guys could come to some sort of arrangement of payment. This could be an immediate payout or a payout dependent on funding (seed/series A). If the value is too high for an immediate payout and the programmer has no faith in you getting funded, you could arrange to make monthly payment installments ($300/mo * x months). As for his rate, I would suggest that he not expect his "corporate rate" for his work. As he was doing this in good faith as part of a team, it's stronger to expect a discount, similar to what you'd charge a friend or partner for work (i.e. $25/hr vs. $100/hr). It's unreasonable for him to expect to be paid as a contractor considering the circumstances.