List,
I have to agree with what Shaun and Oscar stated. Having survived that
dot com bubble of the early 2000's it was a tough lesson to learn.
Those times were like the wild west used to be. VC's were
injudiciously throwing money at any half-brained start up idea in the
hopes that it would catch on and be the next big thing. I worked in a
few startups and it always through rose coloured glasses. I was
offered an inflated salary (mind you I was just a few years out of
college at that point) stock options and a working environment with
free breakfast and lunches every day, razor scooters to tool around
the office, foosball tables, etc etc. Then after 3-4 months these
startups tanked and the stock options weren't worth the paper they
were printed on and you were left pretty much ripping the copper out
of the walls so you had something of value to take away. Suffice it to
say that after having been through that wringer 2-3 times it really
left one with a bad tasted in your mouth. Obviously that experience
wasn't everyone's as I know some people teamed up with companies that
survived and are better off for it. But the early 2000's were a high
water mark for those kind of shenanigans.
Fast forward to present day and the landscape has certainly changed
and things seem to be picking up (at least from my pov). The lessons I
learned back then certainly came with a price and it has given me a
more cautious approach to these startups with their pie in the sky
dreams. If someone approaches me offering to join a start up with the
promise of sweat equity I'm certainly more thorough in doing my due
diligence as far as investigating the company, it's backers, financing
& business plans. And as far as just working for sweat equity with the
promise of money/ownership of the company company coming later I would
have to pass on that venture. There's a baseline for cost of living
and survivability. DC is not a cheap town and it would be ridiculous
for anyone to expect someone to just live off their savings while
busting their hump getting a company of the ground. If one of the
initial creators of the startup is doing that, well either they are
really committed to the idea or they are sitting on enough cash to be
able to take such risks. Definitely put everything down in writing,
especially defining the long term relationship, giving yourself an
exit strategy if things go south. Working on just a handshake won't
cut it.
</rant>
I don't know if this addresses the initial question, but this is
something that I experience through my professional history and it's
certainly skewed how I handle any new business propositions/ventures.
YMMV
Eric
On Thu, Aug 23, 2012 at 8:58 AM, Oscar Merida <oscar@oscarm.org> wrote:
> I think working solely for equity is too risky, at least for my
> tastes. I think it'd be difficult to bound when you've "put in enough"
> and be able to step away from the project gracefully. Maybe some
> combination of $$$ + equity could work, if you can tolerate the risk.
> But to be a successful anger, from that I understand, is really a
> numbers game. You want to invest a little in a lot of start ups so
> when one of them makes it you get rewarded. Not sure that model really
> translates when what you are putting in is your time and not money.
> The former being more limited than the latter.
>
> On Wed, Aug 22, 2012 at 9:18 PM, Eddie Peloke <peloke@gmail.com> wrote:
>> Hello,
>>
>> I've been in the PHP world for a while and have worked for a few companies
>> large and small over my career. A few years back, I launched my own mobile
>> startup and am considering launching a general custom dev shop now. One
>> concept that has interested me lately is the idea of being a 'technical
>> angel'. While we all still have to put food on the table, are any of you
>> taking on work in exchange for equity? As an investor gives their money,
>> are you giving of your tech services?
>>
>> I'm just curious to hear if others are going this route and if so, how it's
>> working.
>>
>> Thanks,
>> Eddie
>>
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>
>
>
> --
> Oscar Merida
> * http://OscarM.org - random thoughts on my blog
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>
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