Programmers Who Will Work For Equity


1

It has been very challenging to find a programmer to work with. I currently do not have the funds to hire a developer as the funds have been used for legal expenses and to create a working site. Are there programmers out there who would actually work for equity only?

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asked Aug 11 '11 at 09:53
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Reginald Woodie
6 points
  • would you work for someone you don't know for "free" until a very risky possibility MIGHT make any money and if you would be the minority shareholder? It can happen - but you are starting with he deck stacked against you. – Tim J 13 years ago

6 Answers


15

For most programmers, this is a red flag. It often means that the owner of the company either doesn't believe in their idea enough to risk their own assets, or couldn't find any investors that believe in their idea enough to lend them the money. Many entrepreneurial programmers have more than enough ideas that interest them to keep themselves busy during any free time they have, so the only reason to work for someone else is for the money or because they don't want to manage the business side. And the non-entrepreneurial programmers wouldn't want to take the risk.

There are, of course, needles in the haystacks. But these things usually work better when two people collaborate from the beginning and already have a pre-existing relationship. At this point, your best option is likely to find a bank (I'd suggest a credit union or other small bank) that is willing to lend you the funds, secured with a personal guarantee of some sort.

Note that this isn't to say you shouldn't offer equity to your first developer, but I'd consider an employee stock purchasing plan rather than giving them the shares outright. This encourages them to become investors without a confrontational entitlement mentality. I'd also consider giving them a portion of the bonus in equity and base the bonus on major milestones.

answered Aug 11 '11 at 10:52
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B Mitch
1,342 points
  • Thank you for the input. We just want to explore all options before a decision is made as there could be a possible good fit going the equity route. – Reginald Woodie 13 years ago
  • hmm, how to send contact details without publishing them public. – Mike 13 years ago
  • @Mike, use the at+name in a comment to alert someone your comment is referring to them, so they will get a notice in their inbox. There aren't any private messages or comments here. The proper method is for someone to include their contact data (e.g. a personal web site or linkedin profile) in their profile, but it doesn't appear that Reginald has done that. – B Mitch 13 years ago

3

Working for equity is taking a double risk:

  • not being paid at the end for the work done.
  • equity have no value at the end.

You, as owner, take only one risk part and the developer both. So, why should anybody work for equity only?

It can work only if the developer have major equity share and is a equal owner as you are.

answered Aug 11 '11 at 16:40
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Ross
2,288 points

1

It would be. You'd need to find a developer who doesn't need an income to survive and someone who has faith in your idea.... and finds your idea worth more than their time otherwise.

Being a programmer myself, I have to admit, I'm intrigued.

answered Aug 11 '11 at 10:19
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Mike
310 points

0

Bring proof that your 'idea' will fly by being able to show that you talked to customers, that you learned in the field, iterated your idea, and ideally be able to show some documented commitment from future clients. Think Lean Start-up Methodology. If you can show that, rather than 'just' an idea, you will eventually be able to convince someone with the skills you are looking for (programmer, designer, marketer...) to want to join you.

And broaden your search for a co-founder including all sorts of channels, off-line and on-line.

answered Sep 6 '11 at 16:57
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Thomas
1 point

0

I do not think that you are best with discussing it with your programmer first. If I were the programmer, I would not be willing to do a project that is unsure of its future and I think that you have to consider the outside point of view. Programmers code to earn and nothing more. If you will find someone who would be willing with that option, then good for you. But I think that would be a tougher job than you imagined.

answered Aug 11 '11 at 12:47
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Ryan Jefferson
21 points

0

Best way to get a programmer in for equity is to get them younger when they just want to cut their teeth on something. Sophomore or Junior in college who knows enough about programming but needs some help harnessing it is your best bet.

But to get a veteran programmer who is tried and true... they (I) would need to be 100% sold on the idea being gold. Or need some $ and Equity on the line or be matched with some marketing funds. Say I valued my initial development time to get the product to v1 at $50,000. I would want to see $50,000 or so in the bank to be spent on marketing/sales.

answered Aug 11 '11 at 12:54
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Ryan Doom
5,472 points
  • That makes sense Ryan. It is actually at version 1, but needs some additional programming to make the site ready for the market. The major concerns is providing the upgrades once the site grows. It would be great to have a programmer handy to implement upgrades for the site. – Reginald Woodie 13 years ago
  • Gotcha, well if you have a v1 already then it may be easier to convince some other developer to lend a hand for some equity. Once you have a v1 / prototype explaining and convincing other to invest in your idea becomes 100x easier. – Ryan Doom 13 years ago
  • @Reginald, Since you already have v1, the question becomes why the original developer is not still part of the project. Lots of reasons for them to leave are red flags, including: they left and became a new competitor, they were fired for creating a poor solution, or they didn't want to work for you for one reason or another. A programmer could be walking into bad code, bad management, and even sabotaged code. – B Mitch 13 years ago
  • Yeah good comments BMitch, I agree. In general it's tough to take over an existing project. Usually when the original developer is no longer in the picture it's because the product they were producing was poor, or there were communication/personality conflicts. Usually either one of those options does not bode very well for the new incoming team member. Expectations are often that the project was near completion just need some 'tweaks' which if the project is junk, means the new developer is screwed :] – Ryan Doom 13 years ago

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