I'm the founder of a mHealth start up based in Florida and am looking for a programmer with a vested interest in our product but can only offer equity. What are some of the best sites/platforms to find potential partners wanting equity?
You won't find anyone worth adding to your team willing to work for equity only, no matter how compelling your product and business is.
The realities of the talent market for mobile developers anywhere is such that a developer would be foolish to work only for equity unless they are a cofounder and have double digit equity.
Happy to talk about hiring and alternatives to full-time hires.
Are you also a developer?
If you aren't a developer, you will probably need to offer 50% as a minimum and actually you're talking about a cofounder here. i.e. as soon as you can pay yourself $1,000 /mo, you both take $1,000 a month.
This is quite normal - it's how most 2-3 person teams startup. And don't worry, even if you've been working on your idea for months and feel like you've created loads of value - it's nothing until it's been executed correctly into a working product.
If you've invested any cash of your own so far (into anything other than your own salary) then there's an argument to convert this into debt on the company books or potentially adjust the 50/50 equity share *slightly*. As a rule of thumb, ask yourself how much equity you'd have given to an investor for $100k investment, and then use that as a scale to determine how much additional equity you should gain for the cash you invested.
I'm not saying you are but... if you're one of those guys who thinks you can offer a mobile developer 5% equity to build your entire product for free then you're going to get a harsh reality check when you go out into the talent market. There are startups in London who will pay the first 1-3 iOS developers £55,000 and 3-6% each (vested over 4 years).
I've hired a lot of developers before and I successfully recruited my own 'technical cofounder' (even though we're both developers) so happy to share more personal experience over a call.
If your concept has hockey stick potential then build an advisory board, recruit investors and hire the talent you need.
Asking someone to perform work for equity only imposes a cost on the talent - the cost of foregoing earnings talent could be bringing in now. Add that cost to the risk of the equity coming in far below expectations because of factors talent can't control (maybe the company sucks in management or sales) and you can see why your offer is singularly unattractive.
Prospective investors will also be uncomfortable with this because of the likely low quality of the talent attracted to an equity only proposition and because of dilution.
It is possible, but you must create a unique and compelling story to share. What makes your company special? What problems is it solving? Why would someone want to come and work with you - especially if you are pre-revenue?
Also, are you offering ownership? Is you're really looking for a Co-Founder then that's a whole different thing. If that's the case, then go to every startup event in your area and start getting involved. Go to Startup Weekends. The more you get to know the community, the more people you will meet and the potential of finding someone willing to come in and help you build it increase.
Critical thing is that if you're not a Tech Co-Founder, then you'll need to share your ideas with those with the right background to build the company - share with everyone and seek their opinions - this will endear you to the right people!
Even more than some of the other answers, I'd ask you to consider how much you believe your idea is worth. If it's substantial then do you really want to sign over 30-50% of the future profit in exchange for your technology? And if its anything other than a substantial amount of equity for a high-probability high-profit venture, why expect someone with critical skills to sign on to the project?
Even with 12-18 months of runway at 80% market salaries you'll probably have to offer some moderate equity to entice someone to take on the risk, hours, and uncertainty of a startup compared to a solid professional gig.
As everyone else mentioned its a challenge to find an experienced developer willing to work for equity alone. The longer you have worked in technology, the less likely you are going to be interested in an equity only deal.
That being said, if you idea is patentable and you are able to secure a patent on it, that would make an equity deal (if it included partial patent rights) much more enticing. If your idea isn't patentable your best chance of getting someone interested in an equity deal is to go after entry level developers. They maybe more willing to take a risk as they build their portfolio and get good real world experience. Craigslist is definitely an option for reaching those sorts of developers, as are developer focused meetup events, and of course college message boards.
Hope this helps!
Its very possible. Although you should show a track record of success. My company needed a developer and did a 75/25 split with my developer cofounder and it worked out great. Others I've done 5% + a discounted hourly.
You need a cofounder that believes in the vision, the product, and most importantly you! Without that its going to be difficult to have someone jump ship for free.
As the CEO of digital agency Vuzum but also the founder of our own startup Widgetic, I can tell you that we've got a lot of similar requests. But we turned them down, and always will.
The reason is simple: if we want to invest time into an idea, we'll invest in our own. And we'll get 100% of the equity while we're doing it.
And more than that, starting a product with someone involved as a partner, who is miles away, would happen with a lot of legal issues and mistrust.
If you're going this route to get an MVP out it's also a bad decision, because if - by the smallest chance - is going to be successful, this initial partnership will follow you across your product's lifetime. See how Facebook paid 60M to the twin brothers for similar reasons.
Just to validate what some others are saying here - it is very unlikely to find the right type of talent and attract them to build your application out for just equity - or if you did, they would require so much of the equity pool that it would become prohibitive to you as a shareholder. But let's say you can find that person (I'd classify it as unlikely but possible), then the issue becomes how you roll the application out with no money to back or market it. Programmers know better than most, that applications are not a "field of dreams" (if you build it, users will come). So selling them on the idea of working with no salary becomes even harder given that you dont have the story arch to show them how you will be capitalizing the growth of the application once it has gone live.
My best advice is to either ask immediate friends and family to see if they know a student looking to cut their teeth on some work and see how that goes, or scrounge around enough to pay a freelancer to built out your MVP (at which point, recruiting a technical co-founder becomes at least a little more plausible).
You will need to pay a minimum salary.
Then equity will be negotiable.
angel.co is one of the platforms where people go to work with startups for just salary, or equity or a blend of both.
If you need help with your startup let me know.
You can find many websites for that on google. But apart from that let me talk about 2 important rules:
Rule 1. When you can get things done for money, don't offer equity. Equity is too big for you to let go, for something that can get-done by paying money (big or small). You don't know if the new person would gel well with your vision or thought process. You could get excellent people who can work for you as freelancers or consultants (it doesn't matter if they are expensive). If you need this person's services for all through the journey, then you can always look at a company to outsource the complete development and maintenance work.
Rule 2. If you still believe that the company needs a technical resource (more like a CIO or CTO), then go all out and find for the right guy, who buys your vision, idea, business model and willing to spend few years to travel the journey with you.
The equity percentage doesn't really matter because its more of a notional value and can be mutually beneficial.
There are sites out there to find cofounders, but as others have already rightly said, you are extremely unlikely to find anyone good that's willing to do it for equity only. Not even with a good story I'd argue and if they were capable of doing it, they would do it themselves and control all the equity.
Anyone accepting of your offer will do so because they don't have a better option. After all, on day zero of your startup, with the best will in the world, you have a zero valued company.
in the USA, you are competing with companies willing to pay good talent $130K a year or more. That is what it has to be worth day 0. The day they join your startup. They have bills to pay after all, so certainly can't do it for nothing.
It gets more compelling if you have already made sales and you're on a growth curve. If you have proven your company has raked in about $130K in non-debt revenue in the previous year. This proves market viability and your worth as a salesperson/marketer, as that is the skill CTO and tech founders often lack and want in cofounders. You yourself are going after people who are proven, yet your skill and idea is yet to be proven to them. They're banking on you to bring in the beans whilst they deliver and to be blunt, you're already in the back foot position of proving you don't value them enough to pay anything. Remember, your company at this stage is worth zero actual dollars. Hence, their equity is zero actual dollars.
90% of startups fail within 2 years, so the Value at Risk for them, as an investor of technical skill (not money) is 2 * $130K * 0.9 = 234,000 for that period of time, which is ridiculously high risk for someone who isn't a billionaire already. Good people sadly, won't touch you with a barge pole. I've been there before and I certainly won't do it again.
Either way, work up to it and I wish you luck in your venture.
This is a lose-lose approach
If this happens and I think most talented developers will not do this (not all, you may find someone sold a company and is looking for something new and likes the idea, never know). If you get someone to agree, they may not be up to par on what you need to scale this business to be big.
A Business is not built just on ideas, they are created on how hard and smart the team works. So I think if you really believe, look at investors and hire more talented people.
If you need help, call me
Unfortunately, you don't. I have a business finding programmers for startups and small businesses, and if it was that easy I wouldn't have any customers.
The fact is that programming is a valuable, high-paying skill, so it's hard to find a developer who is willing to accept equity, which may or may not have any value, when they could work at a job that pays cash, which definitely has value.