What can I offer a partner? (I don't have cash)

If I start a S or C Corp what benefit packages can I offer potential employees and how would I ramp them in?

I don't have the cash to give them a salary so I need an official way to give them X number of shares if they accomplish their goals.

Co-Founder Partnerships

asked Oct 21 '10 at 07:39

Jspooner
113 points

benefit usually means health care, retirement plan, etc. Not equity. – Alain Raynaud 14 years ago

2 Answers

I need an official way to give them X number of shares

That's exactly what http://fairsoftware.net does: "pledge equity to your co-founders." Do you know how much it costs? About $10. If you incorporate, you have legal fees, incorporation fees, taxes (federal and state).

A key advice is to stay away from task-based equity. It doesn't work. What you want instead is vesting based on time, but you need to stay on top of their progress. If they are not making good progress on their goals, have a serious discussion, and if need be, pull the plug.

disclosure: I'm one of the founders of FairSoftware.

answered Oct 21 '10 at 08:46

Alain Raynaud
10,927 points

First I love the support on StackExchange sites! Your site looks like it solves so many of my questions and problems when trying to lunch these websites. Thank You. – Jspooner 14 years ago
Can we find other Co-Founders on fairsoftware or.. ? Any tips on finding CoFounders sir? thanks. – Bhargav Patel 14 years ago
How to find co-founders? Depends on your location. I run a co-founders meetup in Silicon Valley, but there are plenty of others groups, events and meetups you can find. – Alain Raynaud 14 years ago

Partner meaning they are helping you with the company. It makes sense they would want Equity, a certain percent of ownership and revenue.

If they want money for a task, they are not your partners. They are just freelancers.

answered Oct 21 '10 at 08:06

Bhargav Patel
784 points