Business Incubator and Activator Series 1.1
Last year my son and I pondered launching a consulting business together. As always, startup capital and which of us would get paid as partners (and how) were on the table. He had left his day job and I had not. So that was question was easy!
At the time, we were working as consultants with John Gavigan and 43 North, the wildly successful Buffalo, NY incubator and activator at the heart of the Buffalo business renaissance. In new ventures, a common question by the entrepreneur is: "I really need a partner for startup capital, but we have not gone to revenue yet. Got any ideas?" As a matter of fact, yes, I do.
I can’t pay them…
Who says you need to? You can get people to work with/for you by providing many different forms of compensation besides monetary. Sounds far fetched and I really doubted this at first, my initial impressions was that people would only work with you if they have a deep stake and feel like they’re part of the founding team. WRONG.
Here are some alternative ways of compensating people who can help you build your startup:
- Equity – yes, you can give equity without making someone a co-founder. Just make sure it’s vested.
- Revenue sharing – and agreement to split the equity generated from a specific project/product. You can add clauses that limit duration and determine the portion of the split.
- Strategic partnership – working alongside partners to provide them value with your product/service in exchange for them helping you build it up.
For help getting past constraints and roadblocks as you build your business, email me anytime! --Kevin
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