
Ask HN: Alternative consulting contracts - shireboy
I am a software developer with 15+ years working for a small consulting company based in the US.  We have traditionally done &quot;time and materials&quot; contracts where the customer gets an estimate for the project, then pays an hourly rate for the initial development and any future support.<p>This has worked OK, but often people will want &quot;sweat equity&quot; contracts.  They have an idea we could build, but don&#x27;t have capital to pay us.  We usually turn them down.  However, I would like to offer some services to these people in a way that benefits us both, especially if I see potential in the idea.   I see lots of this question _from the entrepreneur&#x27;s perspective_, but not so much from the consultants&#x27;.<p>So my question to HN consultants:  besides a flat hourly rate, are there other contract schemes you recommend (or avoid)? Are there things you insist on or avoid in sweat equity deals?<p>To entrepreneurs: If you wanted consultants to develop software for equity, or build an MVP, etc., what would you want the contract to look like?  Are there things you insist on or avoid in sweat equity deals?
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tboyd47
I never, ever work for sweat equity but what I've started doing for "idea
people" is offering unlimited free consulting that doesn't include coding.

In these engagements, I'll do everything but code; requirements gathering,
research, design documents, etc. And there's no obligation to work with me
later.

This gives them a sounding board for their idea and removes the pressure,
which makes it more enjoyable for both of us. It also lets me see what kind of
owner they are.

I believe when people ask for you to work for "sweat equity," this is really
what they need. They aren't ready to spend money but still want to know if
their idea can work. It's better not to start coding on projects like that
until someone is ready to drop some coin.

