Comment by philbarr | Hacker News Reader

Comment by philbarr | Hacker News Reader

Parent Full thread

> Equal equity among initial founders or it's a nonstarter.

I'm about to have to make a decision like this and could do with some advice. A friend of mine (3D artist / graphic designer) tells me he knows two people who want an app doing. It turns out they're just starting a new company and the app is going to be the product. They have already sold it to one customer and have others in the pipeline.

I discuss the app with them, set out a specification / timeline / cost that they like. But then they start with: Can you set up our email? (yes). Can you do us a website? (yes). Can you do a webapp that the customers can use in coordination with the app? (yes). Etc. etc.

So I say: look, I can do all this stuff but it's going to be a pain to keep charging all the time and then there's going to be support costs on top. I like that your sales driven and seem pretty intelligent and we've got along pretty well so far. How about instead of or as well as cash we talk equity?

They think about it and get back to me yesterday and say yes, they've had a chat about it and would like to do that. We're going to meet tomorrow to discuss a package they've worked out for me.

So what equity should I negotiate for? They have no technical experience and it seems to me that I will basically be doing everything at least to start with. One of them is sales and the other is going to be managing the business (which I have no experience of, I've never been a "founder" before).

Wait, so they're offering you cash (I'm assuming at standard $200/hr consultant's rate), and you instead are asking for a unicorn (shares of something that has a statistically tiny chance of ever generating a good profit)?

That just boggles my mind.

I completely agree. Regardless of what your rate is, unless you super believe in the product, why are you trading cash for equity?

Well, first off there's my ignorance and fear. I've never consulted before and every time I try and charge a rate for work people just slam the phone down, literally. I've tried £50/hr, £40/hr, and now £20/hr. In my day job I get about £25/hr. This is in the NW of the UK and not near any major cities. Secondly, I figure that if the product fails I'm likely not going to get paid anyway, so if I'm going to be taking the risk I should share in any equity reward.

>>> I try and charge a rate for work people just slam the phone down, literally

Good for you. These people aren't the ones who you'd like to work with anyway, very likely to be toxic clients.

>>> I've tried £50/hr, £40/hr, and now £20/hr

By lowering your requerements, you are attracting more slamming-the-phone clients. Stick to at the very least 50/hr (if I remember well, ~400/d is a common rate for contractors in North, e.g. Leeds). Raise it to 75/hr if you are not junior. It will take longer to get a gig, but it will pay off.

>>> This is in the NW of the UK

Damn, I miss Manchester :) sorry for getting carried away :)

>>> I'm likely not going to get paid anyway

Why wouldn't you? You are not a charity organization, you shouldn't be providing free work. You are providing a valuable service, so you should charge the appropriate rates. You don't owe anything to anyone.

Also, if you are willing to work cheap / for free, you will be treated poorly more often than not.

So raise your rates, be patient, don't let others take advantage of you and everything will be alright ;)

I think the problem is that I have a very limited market due to my location, though? If I demand decent pay for my work I may have no work at all. Supply and demand and all that?

So expand your demand market. You can work remotely, or simply travel to the clients. If they're paying you enough, no reason why you can't include travel costs, etc.

I can't really do travel. I work from home now and like it because of having a young daughter.

If I wanted to I could take contract work in Manchester and earn twice what I'm on now. But I don't want the 3 hour commute.

So you might say, "well that's your problem right there!" and I accept that. But I was thinking that I might be able to solve the problem I've specified without doing the obvious, "move to Manchester."

There's truth in it, but at the same time, we are in one of the most remote work friendly industries. Check out threads by https://news.ycombinator.com/user?id=whoishiring and post there too (a while ago posted there, got a decent gig offered in a few days), you should be able to find something :)

I appreciate everyone's comments, but this doesn't help me with what I'm supposed to do tomorrow besides: "get a decent consulting gig."

Tomorrow you go in, and tell them that you want to get paid for the work you've done so far, and you want to get paid now. If they start with any excuses, you simply get up and leave. Lesson learned (hopefully). If they agree, you get paid, and then establish your pay rate going forward. I recommend charging a market rate (whatever a good software engineer will charge you in your country for similar type contract work). Oh, and make sure you have a good looking portfolio (or github account).

I live in Canada and for the past four years the majority of my clients have been from outside the country!

Get online to industry-related job boards and search for 'remote', 'anywhere', or 'telecommute' opportunities, especially in places where the cost of living is higher than yours.

I would check out Github's job board, AuthenticsJobs.com , and te Smashing !agasine job board. not the most glamorous places but I have found work!

Good luck, and charge your full rate, you are worth full price :)

never* tell the client your per-hour; instead quote based on per hour plus incidentals & quote a lump sum for specific project plus a sheet happens clause. also never say never

I've heard people argue agressively several times on the "per hour / per project" debate.

try per day, or per week?

Wouldn't the advice then be, "never specify your day/week rate." ?

Reply on news.ycombinator.com