TL;DR - I’m trying to structure where I’ll do the work for an equity stake which will help the company valuation and raise its first round, after which I can collect my fees off the back of exiting my position.
If I were to offer my services in exchange for equity, is there a way that I can contractually put something in place that means once the company gets it first round of investment I can immediately exit my position.
I have had FAST equity in startups, but I’ve never exited my position or thought too much about it, additionally my experience with cap table related issues is more limited.
(I realize I could maintain my position, but I’m more interested in cashflow)
The entire point of getting equity early is the long play. And more importantly, early-stage investors want their money spent on growth, not funding a very early exit for some contractor. Only a very dumb start-up would agree to this.
If the equity allows you to exit after building it up, then def get it done. I am a funding consultant here. I have relevant experience with this reach out. I assist startups align with VC, Angels and PE. I can be of service if needed.
“I am going to get paid $0 today. When you raise your round, if you raise $X1, I am going to be paid $Y1, if you raise $X2, I am going to be paid $Y2, and so on…”
You’re welcome.
yes, thats what i’m hoping the math to look like, thank you!
Venture attorney here. I don’t see why you can’t structure a fee based on raise amount and/or valuation. It may also make founders/investors less anxious by having you off the cap table and calling it a fee. Feel free to DM.
The Slicing Pie model will allow you to get exactly the equity you deserve. It’s the best way to do this because any other approach means you have to guess the right split. Slicing Pie is a formula that is exact. You can learn all about it a www.slicingpie.com