We have been coding now for about 6 months on our startup. Up until now, we have bootstrapped the entire project on pennies, being cash poor. Fortunately we were able to raise a small friends and family round of about $50,000, which is great because it has become increasingly clear that we need to bring on at least one more coder, and a good designer.
For now, we would like to offer a 1099 position with a cash/equity split. The job should last for about 4 to 6 months, with the possibility of full time employment soon thereafter. Since our cash reserves are still low, we are offering equity to keep the hourly compensation reasonable.
My question: What is a good cash/equity mix for the above scenario, including vesting options, and possible future employ? Open to all and any suggestions.
FYI...we are located in Sacramento.
Thank you in advance for your help...as it is very appreciated!
There is no standard formula here, it's all about what you're willing to offer and what they're willing to accept. To make this simple enough, here is what I would do: