A blog reader (one of three, as far as I can tell) asks:<\/p>\n
I was wondering: do some startups only pay equity<\/span>? I am thinking of launching a startup and I think I have a killer idea — there are very low equipment costs, etc, the only costs are labor and marketing, so I was trying to eliminate labor as an up-front since I have the personal capital for the needed initial equipment.<\/em><\/p><\/blockquote>\n
Yup, in some cases, people work for only equity<\/span> (at least for some period). \u00a0Of course, any person in this “mode” needs some other means of cash support: \u00a0financial independence, a working significant other, or a willingness to dip into savings.<\/p>\n
However, it gets tricky with multiple people not all in the same situation. \u00a0For example, if you’re paying Bob a salary, but not paying Fred, Fred can rightly ask, why are we carrying Bob’s salary and not mine? \u00a0You could give Fred more equity<\/span> to make up the difference, but it can be hard to translate between equity<\/span> and salary cash.\u00a0 It can get delicate very quickly.<\/p>\n
Also, in my experience, it’s very difficult to get folks other than your closest friends & co-founders (that already know you) to work for just equity<\/span>. \u00a0Everyone else will need a lot <\/strong>of convincing the equity<\/span> will be worth something.<\/p>\n","protected":false},"excerpt":{"rendered":"
A blog reader (one of three, as far as I can tell) asks: I was wondering: do some startups only pay equity? I am thinking of launching a startup and I think I have a killer idea — there are … Continue reading