I am a developer and own a web/mobile development agency. I had some success with startup as the technical co-founder. I get pitched few times a week by people saying they have a great startup idea, and if they develop it they will give me some equity. How do I tell them if you cannot manage few thousand dollars for developing a product they shouldn't be entrepreneuring and go get a real job - without sounding like a jerk. I am okay if people ask me if I can develop it for a lower fee and some equity. I really get agitated when people ask for free work. How do I convice them they should pay. Most people who ask for free work can afford to pay.

A number of solid insights here already, but I would add that setting time frame parameters on your agreement will help no matter what the compensation looks like.

That is, if you think the project has promise and the folks running the company seem to have their act together, tell them you’re willing to modify your standard compensation model for three, six or 12 months, after which you’ll reassess the situation.

That gives you flexibility to renew the terms, change your requirements or walk within a relatively short time frame, which helps clarify your potential long-term risk as well.

Meanwhile, they’ll understand that you’re not signing off on a blank check/stock certificate.

Good luck and please let me know if you need more assistance.

Answered 3 years ago

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