I am considering doing some work for a start up for equity only. I know next to nothing about this kind of thing and I'm wondering what specific things should I ask before entering into any kind of deal?
The critical question is the one you ask yourself:
If you received compensation for this work-- would you turn around and invest it in this company? From this question you will determine if you want to be an investor in the company. My assumption is that you will want to know all of the same type of questions any other investor would, like:
The list of course goes on, but you are being asked to invest your time, lost opportunity to earn other revenue, and dip into your other savings/investments to pay your bills while you work for equity. Choosing to work for equity means that you believe that his is the best source of your investment at this time.
Are you entering in as a co-founder? You may want to check out the co-founder equity calculator.
Welcome to the Co-Founder Equity Calculator! It is based on almost 3
years of one-on-one discussions with entrepreneurs through the
co-founders meetup, the founder conference and advising various