Getting Paid in Equity - what is the simplest way to structure payment for consulting work in equity?


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I'm opening a small start-up consulting business and would prefer to be paid in equity. It's unusual, I know, but it's my preference.

What is the simplest way to structure an equity-pay transaction with a client? I want to make it nearly as easy for the client to pay me in equity as it is to write me a check. Apple iPad easy.

Finally, what is the best way to structure equity payment when working with a client who isn't working towards a large exit, such as a local dentist office? Do I negotiate equity that receives dividends? Or just common shares that benefit whenever the business is liquidated.

Thanks for your thoughts on these 2 questions.

:Justin

Equity Payments Consulting Micro Startup

asked Nov 17 '11 at 04:01
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Justin
11 points

1 Answer


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Sorry, but I just don't see how this is going to work. The typical local dentists office isn't going to be interested in complicating their bookkeeping just so you can get a few shares of stock for doing some kind of work for them.

In order for this to happen, the business needs to have an accurate valuation and unallocated shares. Just guessing from personal experience, but this will happen about 10% of the time, at best. If they are an S-Corp then paying you in a few shares represents a HUGE paperwork headache for them.

Ultimately, there is no "Easy" way to do this. There isn't even a moderately difficult way to do it. Every case would be a one-off if you're really talking about doing consulting work for a wide variety of SMB's.

answered Nov 17 '11 at 04:32
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Brian Karas
3,407 points

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