Discuss

I'm bringing on someone who has been contracting for me; she will now be the Lead UX/UI Designer.  She is not coming on board as a co-founder, but as a full-time employee/for equity.  I'm wanting to find the right balance to honor the fact that she is taking risk by giving me 160 hrs/month for $0 cash (until funding).  

I’ve estimated the valuation of the my company at 3.5M.   Her current contract rate is $45 (low, b/c she's transitioning into UX/UI).  I used a formula of 90K/3.5M = ~2.57 (x2 as a risk multiplier for taking all equity and no pay) = 5.14%.   Curious as to what people’s thoughts are. 

She wanted to know what I think about a different scenario:

- She gets paid in equity pro-rated for the amount of time pre-funding (i.e., 100% if 12 months, 50% if 6 months, etc.)
- She receive cash payment at discounted rate - let’s say half - after funding. The other half is paid in equity.

- The equity terms are tbd. 

However, I am against splitting it as deferred cash and equity. I'm concerned it will price the equity, which I don't want to do. As such I'm thinking to stay with straight equity for now: the same way I am working and all other team members are working.   


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