

Ask HN: Will Work For Equity? - USNetizen

I've had the opportunity to work for a few startups over the years in a variety of capacities given that my expertise spans both project management and enterprise software development.  I've worked in both an advisory role for management or technical operations, and also as a contracted software engineer or even once as an interim CTO.<p>That being said, I've picked up a little equity from some small companies here an there (not much, but a good amount) and was wondering how many of you had done something like this - worked on the side for a startup in exchange for equity only.  Any success stories?<p>I do what I do mainly for the love of it, and being able to learn new things.  I'm starting my own company now and having worked with these people over the years I have learned a ton.  Money was secondary in my ambitions while I was doing this work.  I was fortunate enough, as an independent contractor, to always have enough work to pay the bills while I did these projects on the side for startups in exchange for equity only.<p>What are everyone's feelings good or bad about something like this? I see it as sort of like an investment of human capital for a startup in lieu of a pile of cash.
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ChuckMcM
I've worked in an advisory role for a number of startups on a pure equity
basis. It hasn't made me rich :-) But its always enjoyable and satisfying
(which are my definitions of 'success' so yes its been successful).

That said there are two kinds of "equity" you can work for, one is to create a
restricted stock grant which vests preferred shares during your tenure (that
is paying you 'real' money as it were) and then there is an option grant for
common stock which has a specific strike price. That is paying you in lottery
tickets. If you get the former then even in an 'acquihire' sort of exit you
have a shot at some compensation, whereas with the latter the common stock
gets wiped out and you don't end up with anything but memories.

Which way you choose to be compensated should probably be based on how much
time you expect to invest. If its coffee and cakes once a quarter before the
board meeting to review strategies and messages, the latter is appropriate. If
its put together an engineering team and set up the processes for building
this company, I lean toward the preferred shares. Your mileage will vary of
course.

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USNetizen
Awesome advice.

