The consultant/contractor would likely be to avoid payroll taxes/withholding/processing fees with TriNet etc - not to avoid giving equity. (And, technically, it

The consultant/contractor would likely be to avoid payroll taxes/withholding/processing fees with TriNet etc - not to avoid giving equity. (And, technically, it's illegal to "pretend" someone is a contractor when they're not - but that's a separate issue :) Remember, this is all at-will employment - either of you can end the relationship at any time. This is where an equity grant/option with cliff vesting comes in. 4 yrs with a 1yr cliff is fairly standard... In other words, if you get fired or leave before 1 yr, you don't get that equity/option and it reverts to the company.