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Should I provide equity to my content developer?

I am a single founder and my startup is having a good traction. Currently planning to have an content developer for my product, who will be take care of all the content part of the product. Should I consider giving equity to him? If I should give him equity, what should the percentage be? If not, what should I pay him? Please advise.

  • Either you pay him, or you give him equity. Otherwise you’re an asshole. How else can you justify giving nothing to a person who helped build your product, and without whose skills you would not be enjoying that good traction right now.

    If you don’t have the budget to pay him, then give him at least 20% in equity. After all, he did most of the hard work in building the product; while you’re the classic “idea guy”.

    Basically a guy who justifies doing nothing but come up with ideas while someone makes those into reality. A fairer split would be 50/50, but since I don’t think you’re the type to be fair, give him at least 20% in equity.

    Reply

    • Thank for your reply. Actually my question was, I have built the product myself both code and design, not the just the idea guy 🙂 also handled the content till date and currently don’t have a content creator yet, so only now i am planning to recruit a person for the content handling. So as person who joins my venture as a content guy what could be the fair share. That’s my actual question. :).

      Reply

      • Okay, I’m the guy who made the first reply. Sorry that I misunderstood; I thought you meant that he built the site. It was late at night so I didn’t read it as well as I should have.

        Anyways, I think a person like that should get no equity unless you don’t pay them, in which case give them less than 1% equity.

        It’s better to pay an intern $10-$15 an hour with no benefits; preferably someone who is a college student who therefore won’t have crazy demands about benefits.

        Reply

        • Sorry, have to disagree.

          So the OP has a great product and already getting traction. To then throw an intern at content creation would only put on the brakes.

          Let me guess: maybe you’re not a writer? And maybe you think anyone can put the content together, even some old intern?

          Sorry. dude, but content of all sorts MATTERS. Sales letters, website, emails, autoresponders, each and every one of these pieces screams out who you are.

          Communicate badly or ineffectively and you don’t get the click.

          Reply

    • BEFORE any equity is even considered, since you have traction.

      A – ALL equity regardless of percentage should be vested over two years with a bit each month as people stay on 10% earned at .50 shares per month. Common or convertable to common units.

      B- Employee agreement, all IP stays with company and a non disclosure at a minimum.

      C- Incorporate as a C corp, you hold preferred employees get common.

      D- set aside 10% or so of common for an option pool.

      There is plenty more ! If you have about $2500 there are a few boutique law firms that do flat rates and have “startup kits” Scott Walker at Walker is one. I have never used Walker and cannot endorse but the folks over @launch an @jason Calacanis with the youtube channel ” this week in startups ” likes them.

      Good luck, keep up the good work !

      @kaffegeek

      Reply

    • Read properly before you call someone an asshole. He said “content”. Perhaps you don’t know the difference between content and product.

      Reply

  • The easiest thing to do is to ask the person you are recruiting if they will be open to cash or equity arrangement, and if they are just offer them what you can. In my company, we allocated a certain percentage of shares to the advisory board pool and give part of that to folks who want to work for equity. As long as you are honest and transparent with everyone, it all works out great in the end.

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  • I think 20% is preposterous! I think you’re looking at a % of less than 1%, IMO more like .50 – .25% with a stipend.

    You get can content made for $20-40/piece depending on the nature of the content. I think you’re better off doing that or hiring interns at $10/hr but then you have to manage and train them.

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  • If you pay them, you can fire them. If you give them equity, then you’re probably stuck with them. So, think of the long term picture.

    Reply

  • Take a step back. How much work are we actually talking? a day, 2 days, a week or more? Depending on it there are various options. I don’t think you want to go the equity route for just a day or 2. You’ll be spending that amount in legal fees drawing up documents, and that is something you do want to do, don’t try to be to cheap on that. Depending on your State, there may be other funding available, check with your local small business development office for options. Pay them on a credit card or in installments, even if you have to pay them a little more than their regular rate. If you make $ of your website, pay them a % of increase in sales from the current level, up to their regular payrate plus 25% or more. Colleges have various programs for interns as mentioned below.

    Reply

  • (I am the one who asked the question)

    Wow, all your thoughts are real eye opener and it help me a lot with my decisions. I am so thankful for you all and your valuable time.

    Cheers

    Reply

  • If you are asking this content person to do a lot of content and paying them by piece, that’s dumb. If it’s one-off’s, not good either, because you need someone to build brand, create voice, and have the message consistent. Hopefully, you will find someone who will quote you a decent price for being on retainer because that is what you should have if you want your content done right and to get traction. Price? Depends on their skill level. If you are going to pay them in equity, make sure it is fair. The optimum thing to do is come up with a payment/equity package. FYI, VP’s of Marketing are getting 1-5% equity so use that as a gauge when deciding on the equity you want to provide to your content person.

    Reply

    • I like your retainer idea. I’m a writer and have been brought on that way. Works well for me because I have dependable income; works well for client because I give him top priority (within reason) when he knocks.

      Reply
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