Hacker News Reader

Comment by asanwal | Hacker News Reader

Interesting idea but think there will be a huge adverse selection problem here. Any startup giving out equity for tasks but which as no cash to pay may not be all that valuable to have equity in.

And I wonder if the same can be said of the job seekers who use this. Really great people get paid for their work and perhaps get equity as well.

Part of me hopes I'm wrong about this as it is an interesting idea.

View on HN

We agree with you, however, this is a way to turn an idea into a minimum viable product without spending money. This may not be the best way to build a full product, but our philosophy is the more hypotheses you can test without spending cash the better off you are. Thoughts?

With this comment, I lost any faith in this idea as it's clear this is not about both sides deriving value in the process. In your scheme, startup "founders" or really wantrapreneurs get to try out half-baked ideas by giving away worthless equity to folks that are ultimately being duped while idea guys ultimately talk about their MVP and pivots and other bs that people who fancy themselves as startup founders think they should talk about.

On a related note, the "founders" participating in sites like these give a bad name to business people with legitimate biz building skills.

I'm curious about why you think that? Most of the startups that have used our service so far have been started by engineers (including myself) that need help building a product they actually believe in... not just idea people going after the first thing that comes to mind.

Also, when equity has been issued it was typically in the 10-30% range. Essentially, businesses are using this as a way to find partners - not to dupe engineers.

Thoughts?

Why would I want to build that product in exchange for equity, which will probably be worthless?

If you don't want to spend money on your idea, chances are it is even more likely to fail than an average startup. This feels like a way to exploit talented and gullible people who want to work at startups.

EDIT: typo

Why would you ever agree to work for a company that builds useless products, regardless of pay?

In our experience, founders have spent money on their ideas. However, many bootstrapped startups (particularly the hardware engineering companies we have helped) don't have enough for talent and prototyping. When equity is issued these companies are bringing on partners, not gullible engineers. Just my two cents, please let me know if you see it differently.

this. I recently spent 4 months coding nights for a startup and got told it's going to be "hours for equity" - where they were giving themselves a high valuation and me effectively a "market rate converted to shares". I quickly ran off.

So far my opinion is that you need to increase your rate at 10x if it's for equity on the table, and the startup is bootstrapping. You're essentially a part-time cofounder in some ways because the product/business model can rapidly change depending on who you're working with, and you have essentially zero guarantee as to how you will know about the success of the business later on.

I also saw someone at a startup weekend earlier this year do the same idea, although he came off as a shady businessperson in the process, and had a very hard time explaining how it all worked.

Overall, I'm tired of business folks making this idea. Unless someone else outside the business does an official valuation, this doesn't really make sense. Also, business folks tend to think "hey, i'll rent a coder as 'hours for equity' then build just enough to pitch to investors, then find 'real people' while i have tons of leverage". Airbnb may be the rare exception where this worked out well, but that guy was paid in cash.

Reply on news.ycombinator.com