Business Development at Celonis. My goal is to help you develop scalable, repeatable sales processes to achieve your revenue goals faster and more efficiently.
You really have two forms of payment here given that you can't be paid out of the small sum of money the founder has. The decision as to what to accept depends on the idea the person has and your belief in it.
It's called sweat equity for a reason. If the person you've been approached by is not willing to give you equity to work on the idea it's a major red flag. You should be compensated for your work and if the person is cash poor they still have equity in the company that they can assign to you. This is given that the person who has the idea plans to scale the company and potentially exit it.
2. Delayed cash compensation.
If the person is planning on raising capital you can create and agreement that states that they will pay you once the company has raised capital. If you do decide to accept a delayed cash compensation package, you should first understand if the person is planning on raising capital and how much they are planning to raise. From a founders perspective they'll want to only pay you the delayed cash comp if they raise over a certain amount which is understandable. Make sure you understand what that mark is and that it's attainable.
3. A combination of equity and delayed cash compensation
A combination of equity and cash compensation has less upside then only equity as well as less risk. You'll be paid less because of the equity piece but also have a part of the company for the long term.
With all those options out there it's important to note that the best option for you depends on your current situation and long term interests.
Be proactive, be personable and be human. Understand why people are joining your community and reach out to them personally. Some of them will become advocates for your brand and community and can help you recruit new members and also help you create content and keep the community engaged.
You probably won't be meeting with VC's with just a prototype (unless you're in certain industries). You're better off meeting with angel groups and allowing them to see and use your prototype. Your prototype won't necessarily increase venture capital but it may increase your valuation if the rest of your business fundamentals are solid.
There have been many great answers below covering a wide range of topics necessary for you to succeed at an early stage.
I would emphasize having a strategic plan for how you will survive up to a year and a half without taking a pay check. Once you decided to quit your job you'll have to consider how you will live including housing, food, entertainment (Yes, you need some) ect.
If you're constantly worried about how you'll eat or where you'll be living in a month, it's tough to stay focused on growing your company. By strategically planning and assessing these things you'll free your mind to focus on what's important in your business, not the other things.
And yes, entertainment is necessary. You can't work 17 hours per day 7 days per week. Even Mark Cuban in his book wrote about the bottle of cheap champagne he would drink on Fridays to keep himself sane. Plan to have some entertainment in your life. You can find ways to do it on a shoestring budget.
It would be a good idea to think about your support system. Nobody can do everything themselves both in life and business. Surround yourself with people who you can rely on to be there when you need them.
Other than that, stay lean, stay hungry and get out of the building.
Full disclosure, I used to work there but Axial provides a great platform for identifying relevant m&a advisors. With their platform, you can view a number of qualified bankers/advisors, see their prior experience and determine who would be the best fit for your business.
My recommendation would be to develop a list of 5-10 bankers, interview them and decide who you feel most comfortable with.
The process you choose to find the right partner is almost as important as the m&a process itself.
If you're looking to find a business partner I would recommend even before starting your search to think about and analyze why you are interested in bringing on a partner. Are you looking to find a complimentary skillset? or are you bringing someone on to take work off your hands?
Understanding what you are looking for and who you hope to meet is the first step in a successful partnership arrangement.
Once you've decided on what you are looking for it's time to be aggressive. In a recent search for a technical co-founder, my partner and I effectively created a sales pipeline filled with potential candidates. We did a majority of our work looking online finding potential partners on Angel List, Built in and Co-Founders Lab and complimented that with attending meet-ups and other in-person events. We developed a list of about 40 potential technical partners and reached out to them 1 by 1 tracking our outreach. A majority of those we reached out to turned us down, that was the bad news. The good news was because we reached out to 40! people even though a majority turned us down we still had a large enough pool that we could find the person we thought would work best with our team.
Side Note- Once you have reached out to potential partners who are interested in working on your project, your job isn't done. You need to get them to understand your business and get them to buy in before you can move forward.
To summarize Understand your motives, cast a wide net, be aggressive and sell sell sell!
I would highly caution against taking this strategy.
First, if you are considering an exit strategy it's important to understand what your motives are behind selling. Are you simply looking to sell to the highest bidder? Would you like to stay on with the company you sell to? Do you think you could go back to working for someone else?
If you're selling for money alone, often times the highest bidder is someone you wouldn't expect. Companies who are in certain markets tend to see the majority of the deal flow (acquisition targets) because the sellers both intermediaries and company owners approach these buyers first. Companies are constantly looking to expand into adjacent industries and will pay a premium to do so.
An example of this would be a starter log company acquiring a chocolate chip cookie brand or Accenture acquiring marketing firms.
If you have other considerations besides price, you won't know until you have ownership meetings and get a better sense of whether your goals are compatible with theirs.
To echo the sentiments of the previous answers, focus on creating value and also stay on top of the m&a trends in your industry to gauge the valuations and where they seem to be trending.
I'm going to reiterate the sentiment expressed in the previous responses to this question.
Have you validated the idea? Have you spoken to people who could potentially used your product or service? If so, and you've decided it's a painful enough problem in a large enough market then you may be ready to invest in the time and effort in finding a developer.
My strong recommendation as a non technical founder 3x is that you should aim to bring someone onto the team and slice them an equity portion so that they're almost as invested as you are in solving this problem. I would then work with your developer to build out an MVP and begin to do user testing of your product. Throughout the process you should be speaking to potential customers, don't stop in the development phase. It's tempting to be excited about building something and place less emphasis on feedback but I highly recommend not doing that.
You want to have a technical member of your team to be able to act on user feedback actively without having to pay to change your features given that A) You won't nail it completely on the first go around and B)You're going to need to be adding features and testing constantly.
To find a developer I'd recommend looking on Angel List or Built in and finding people who are open to co-founding or side projects. You're going to need to present them something solid but it's doable.
No but it should be viewed as a warning for any company in any industry to never stop innovating and improving the quality of their products and services.
Also no matter the size of your company, please refrain from spending millions of dollars of investors money on your holiday party.
You need to find and understand the behavior of your target audience ie. college students during the summer months.
I'd start with the most concrete thing, summer internships and take it from there.
Your goal before the summer should be to completely understand the audience. Where do they go? what do they do? what do they pay attention to?
Once you've done the leg work and analyzed their behavior start formulating some plans as to how to reach them.
You should brainstorm several ideas and keying in on the ones you believe will be most effective. I'd select 2-3 you believe will be your best performing and execute.
Be sure to track the data and determine which method has been most successful for you.