

Ask YC: Hiring without pay - PStamatiou

Lets say your startup needs talent to work part-time (maybe even just 10 hours a week) in exchange for shares. How do you find people to accept that? Everyone seems to just want money instead or in addition to shares, which is understandable.<p>Also, assume that no one else on the team gets paid as it's all bootstrapped.
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tptacek
People who work without pay for equity at the beginning of the company are
founders. See: every other post on YC about "how to recruit cofounders".

The risks involved in seed-stage, pre-revenue private company shares are
spectacular. Management can and usually will drastically reduce the value of
early shares throughout the life of the company. That risk is over and above
the fact that your company will, like all startups, likely fail.

You didn't say this, but let's assume you're talking about developers: they
bill $100/hr. You're trying to sell them shares for "maybe as little as" $1000
a week. The answer to that problem is: "give them a _lot_ of shares".

The easier answer, which will work better than equity, is to open source.

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edw519
"The easier answer, which will work better than equity, is to open source."

Explain, please.

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Prrometheus
The argument is made in "The Cathedral and the Bazaar". Basically, the open
source development method allows you to use the labor of many other
developers, as long as they continue to find the software useful. There may be
a version online, ESR is pretty free with his work.

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zenlinux
You need to have something really compelling - a product that really excites
people and/or a high liklihood of success in the near future.

I know someone who is about to start some sw development work for a local
startup for equity. The company is getting ready to sell their first product,
and he told me that his plan is to try working for them for eight weeks and
see if they can actually sell their product. If not, he's planning to quit.
He's been totally up-front about this with the founders and they're ok with
that. So a creative strategy like that might work.

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aneesh
Are you working on a really interesting problem? Either that, or you better
have traction by the truckload.

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ardit33
If what you working is interesting, if you are giving good and fair amount of
equity (i.e. as a starting founder).

If you looking for an "employee", without willing to pay, then good luck
finding a sucker.

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rguzman
No matter what you don't want to hire someone who would take a bad deal. So
you should make sure you aren't offering one. So, suckers are ruled out.

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brianlash
I'm late to this conversation but thought I'd weigh in anyway because I found
myself in a similar predicament recently. I was able to recruit a talented
developer-partner on the grounds that he'd receive 40% of the sale price of
the application. Maybe my experience can help you.

When it comes to recruiting, I think the answer lies in speaking candidates'
language (if it's a business guy, remind him that startup experience looks
great on a resume; for developers, make sure they know you appreciate the
importance of their role to the success of your project). I think it's most
important for the latter that they believe they'll do important work and feel
appreciated... it's regretable so many of them have had bad experiences with
crappy employers, but you can use that history to your advantage by setting
yourself apart from it.

The rest is details: Write up a job description using your best Ogilvyian copy
(reference copyblogger.com). Headlines matter.

I also suggest you use a triangulation strategy when you talk about
compensation. I approached it by offering candidates their option of 1) $2500,
2) $1500 + 8% equity, or 3) 40% equity. On its own the 40% arrangement
wouldn't have stirred much interest, but set against the backdrop of the other
two options it looked like a great opportunity. I designed it that way
deliberately with favorable results.

Hope this helps.

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webwright
Yeah, this doesn't work-- more trouble than it's worth. Co-founders are
better. Or get a loan. Or funding.

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DaniFong
They basically have to be close friends, or unusually naive.

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brlewis
Yeah, finding those naive people can be tough. Here's one, but it might be
hard to get him to do it again:

[http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-
li...](http://paulbuchheit.blogspot.com/2007/12/is-there-more-to-life-than-
money.html)

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wheels
A prototype works wonders. We've actually had a couple friends that were
interested in getting in on things after they saw in non-vapory-ways where we
were going. The way that I got my cofounder on board was to draft a
presentation for potential investors and to present it to him. Two days later
he was in.

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chollida1
Well it's been said here a few times but if I try to look at your request from
the perspective of a developer you're trying to hire, I'd probably expect alot
more equity than you're willing to give.

For example, consider you work 40 hrs a week and you want me to work 10 hours
a week, for simplicity sake. Since I'm working 25% as much as you I'd expect
25% the equity that you have. So if its you and a partner with 50% stakes
working 40 hrs each ontop of my 10 hrs then I'd expect 9% of the company
because that's how much of the effort I'm contributing.

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subwindow
Interesting idea, interesting people with enthusiasm. The challenge is
convincing people of those three facts without coming across as an overbearing
asshole.

Generally, you're going to have a hard time recruiting people that are going
to be doing more work initially than you are going to be doing. I.E. a non-
hacker trying to recruit a hacker to do some coding will have a tough time.

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anamax
Let's say that someone else had a startup and they needed your talent under
those conditions. What would it take to convince you to join them? If you're
not willing to offer that, why should someone else accept it?

BTW - Part-time isn't necessarily attractive. It only works for folks who have
a hole in their schedule. You might get more takers for temp than part-time.

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sharpshoot
all comes down to if you can convince them. the founder of siebel systems got
the first 20 employees to work for free initially.

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dbreunig
Can you convince them you're going to make money? Cause that's what makes
those shares worth more than the paper they're printed on.

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lyime
Thats actually not true. Not everyone wants money. My gf works for a startup
(online picture editing site) and she currently only works for shares and no
pay. I think many college students would be willing to work for shares.
Especially if you have a decent startup and viable idea.

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bayareaguy
I think the answer is different depending on who really stands to gain from
being part of it. Does it help a community to the point where they will want
to lend a hand to keep it going (e.g. Wikipedia) or will only founders and
investors benefit from it?

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icky
> Lets say your startup needs talent to work part-time (maybe even just 10
> hours a week) in exchange for shares. How do you find people to accept that?

That's easy. Just make sure the the "shares" you're offering them are shares
in Google! ;-)

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noodle
you need to do even more legwork to prove out the business model and plan than
you would for a company like YC.

i'd be willing to do work for shares if i believed in the model. hell, i AM
working on a startup with someone i didn't know beforehand because i
personally believe that the project will become extremely profitable.

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extantproject
It probably helps for them to be interested in what you're making; if they're
not, then hiring them is a bad decision.

