Someone offered to be the CTO of my company and expand the business worldwide. Is this a good deal?

I have a 3-year old company that sells an exclusive product online. The company is profitable. We are the manufacturers of this product and we have our own brand.

We have been working with freelancers and other outside companies for the technical parts of our ecommerce.

Someone just offered to be our CTO. He will develop the ecommerce from scratch for free. He will be responsible of all technical aspects of the business… IT, SEO, SEM, etc.

He won’t put in money, only talent.

Is this a good deal? What percentage should we offer?

  • Why would you offer any equity? This should be a standard employment transaction, not cofounder hiring for an early startup.

    If you are interested in ecommerce, etc, then hire this person wants to work for you, just like you would any employee (or contractor). Offer him market rate salary + stock options (not equity) attached to a vesting schedule. Preferably hire him as contractor (salary only, no options) for some months, then decide whether/not to hire him fulltime, depending on how it goes.

  • This person is probably going to waste your time and money. Watch out for the smooth salestype guys that look great on paper but are completely unable to deliver. Does this guy even have the right experience?

    And if he’s any good, why would he want to work for you? And if you have the money to hire anybody, why the heck would you hire this guy specifically?

    If you decide to hire this guy (and you probably shouldn’t) then offer him a salary + stock options with a vesting schedule, exactly like the previous poster recommended.

  • A CTO develops and manages technology vital to the product or operational performance of a company.

    A VP of business development or a VP of sales develops channels.

    Slapping up an ecommerce portal is neither. What is this hot shot’s specific plan for marketing? Which, by the way, is a marketing role.

    If all they’re offering is web development, that’s a consulting or contract job.

    A good test is to ask this person to put together a 3 or 5 year budget plan including specific measurables for performance and spending – spending in particular on the development and the marketing aspect. Then show this plan to a real CTO to validate.

  • It sounds fishy, no salary only talent ? And when sales sky rocket, get ready for a ” I gre your business for you speech” Not good . Often as a startup, we get excited when people offer to do things for less, or nothing or batner. Frankly neither party knows what it is getting into. From My experience, and boy I learnt the hard way- a person doing something for free, will never put in the effort that a salaried person will. At some point they will say, there is nothing in this for me, why do I give a ‘rats *** ”

    So before you go ahead with this kind of a scenario, do your pros and cons, make a list, ask around on the background, reliability of this person, and then make your decision. You’ve already got some good answers up there.

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