

Ask HN: Help with counter offer for a stake in company - ilteris

Hey guys,
I have been approached by a friend with a startup idea. He has no technical skills but he has marketing skills and he has resources, both financial and potential customer wise. Project itself can be built in a few months with a ballpark of $30-40k.This is not the first time I have been approached by people with startup ideas. Actually, I have relatively good experience at finding teams overseas and managing &#x2F; building technology with them as I am a developer as well. I delivered a few projects before with this approach. However, I have always quoted the cost of project to those who wanted to get it built and didn&#x27;t pursue an ownership. I am considering taking a different route this time and considering  doing a counter offer and ask stake in the company for part of my services instead. This is the part where I am clueless. Is there some written or accepted formula for technical people like me, so we can at least calculate the percentage we should ask in these type of situations. There&#x27;s definitely some hard cost for outsourcing parts of the project and things like servers etc as you can imagine. I will clearly won&#x27;t pay any of it. ideally I would like to get paid to be able to feed my self and have some cushion too should things go sour and it fails. How should oneself approach to these kinds of situations? I would really appreciate any feedback.
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11thEarlOfMar
You should ask if he's open to that and see how much value he places in your
contribution. I've been in his shoes to some extent, but in the end what
matters is his perception of the cash trade off and to what extent he wants to
get you committed to the company.

If he is open to it, ask what he thinks it would be worth as a % and what form
it would take (options, restricted stock, ...).

If you do reach an agreement for equity in lieu of pay, be sure to get good
contracts in place. It's impossible to know all the twists and turns that can
come along when you are doing a start up and you'll want to ensure your
contribution and sacrifice are rewarded.

