Does anyone have “sweat equity” templates or examples? thnks - mmahr
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brudgers
Unlikely because sweat equity is so problematic (from unclear at best to
illegal at worst) for a legitimate business of the sort that uses contracts.

Good luck.

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mmahr
Thank you! What scheme you consider better at this stage?

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brudgers
It depends on what sort of business you are trying to form. A group of people
can form anything from a traditional partnership (hire an attorney) to a
Delaware C-corp (there are substantial risks in not hiring an attorney) to
anything in between and lots of other things that are not based on US
practice.

Which is appropriate really depends on what type of business is really under
consideration. If the plan is to build a company attractive to Sand Hill Road
VC's [0], then a C-corp that owns all the intellectual property and has
vesting schedules and pays everyone a legal salary is appropriate and that's
the basis for much of the 'standard startup advice' that circulates around
Hacker News.

But people call lots of other things 'startups' and many of those are small
businesses and other forms of business organization are often appropriate.

Besides legal complexities, the problem with a contract for sweat equity is
that it is premised on adversarial interests rather than mutually aligned
interests and incentivizes meeting the letter of the contract rather than
building the business together.

[0]:
[https://en.wikipedia.org/wiki/Sand_Hill_Road](https://en.wikipedia.org/wiki/Sand_Hill_Road)

