Did you know that the value of sweat equity in the USA equals 1.2 times their GDP, which is over 20 trillion USD1? I was stunned when I read that. Now the market for service-for-equity is probably not so big (yet). But it is definitely a serious option to get the resources you need to build a business. It is much more direct than fundraising and finding investors because here you can take the direct route. You can read a lot about fundraising and find programs that guide you through it. But what about service-for-equity and finding the right service investor? Not much on that. So keep on reading if you consider this option to build your startup.
3. Market validation & Testing
In this article, I aim to take a closer look at convertible loans and some specific terms that every founder should know if they consider entering such an agreement.
It is a legal requirement for start-ups to deal with topics, accounting, and HR. What working with a partner for bookkeeping and HR does is to enable start-ups to have an optimal administrative setup and access to expertise in line with their needs. For this, the outsourcing partner must be as agile as the start-up itself.
As a business owner when you are starting a new brand, here's what an obvious to-do list can look like: you need a product or service, a name for your brand, a logo & a website. While these are solid foundations to build your brand, these are just the beginning of a never-ending road to building your brand.
Why do cofounders usually start to fight? Either because they can not agree on how to split equity in the beginning or later when a cofounder leaves prematurely. The former can be solved over a long weekend usually. The later can lead to costly legal battles and the ruin of your company.
Last updated on July 6th, 2021
As an early-stage Startup ourselves we know that (Startup) life can be challenging during the bootstrapping period. Startups who are looking for funding need to prove their business model before talking to investors, usually by getting user traction or some kind of market validation. So that means either investing a lot of their own time or finding supporters to accelerate the process. Assuming that finding and compensating potential cofounders, supporters, freelancers or other service providers is simple and realistic, is it also more effective than receiving traditional money investment, especially in the early phase?
Splitting equity is often a neglected topic and done at the last minute. However, it provides an important foundation for the success of your company, so I have asked myself if there is one formula that would allow everyone to get it right.
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