Hi! Our team is trying to build our MVP social networking app, but don't know how to reach out to the right team of designers and developers to do so (we're also looking for a CTO or technical advisor, which might make this a little easier). How do we go about sourcing the right team, if we know we can only offer equity at this stage?
Hi Aleena, Firstly congratulation on starting up. In general, there is mixed opinion around working on an equity basis that too when it involves the design and developing from scratch. Whether it is a freelancer or an agency they are focused on earning equal to the effort they make. There is likely anyone at such stage would like to wait incur effort and wait until the product becomes successful and returns the value. That too will take several months and ROI is not guaranteed.
The best approach would be to seek angel investing or fundraising if you think your product has potential and you can make it a success. prepare pitches for investors and seek the fundraiser, then hire talents to build MVP with the USP and start covering up the market.
As of the pandemic, there is a very thin population or I would say a rare quantity of people who would be interested in equity now. You can join several forums or connect with people to get help. I have found a person to collaborate with on a product here on CFL. however be aware that, it's time taking and a little exhausting yet worth it giving a try.
Hope that helps. Still need any help , feel free to ask me anytime
Aleena, just like Sandeep is saying, 2021 is not the best time to get cofounders onboard of any new business that doesn't have appropriate funds.
I've had multiple pure equity deals earlier. Not open to those now.
But I can tell you the situations where a pure equity-based deal makes sense for a software guy like me (designers might have a different story):
1. I can accept a lightweight technical advisor role that is NOT hands-on. It is an OK deal as long as I only spend some hours guiding others. If the company succeeds, I win. If the business goes as it usually goes, I only lose some hours but perhaps made interesting contacts or gained valuable knowledge/experience along the way. Even in the case of complete business failure, I might consider myself having gained at least something valuable and risked just a tiny part of my lifetime. Not a bad deal.
2. I join as a CTO which often means being the technical cofounder (since it's only paying equity). Makes sense ONLY in a case I have more than half of the job ready-made from my previous work and have no issue with copyrights or other legalities in reusing old stuff. Such as an app from which I can easily extract the technical framework part which I could quickly turn into another quite similar app. In this case, again, I risk very little of my ACTUAL time but have something to win if the company succeeds.
I cannot think of any other situation where I'd consider a PURE equity-based offer. Bad deal.
I would never take a deal where a full product needs to be built from scratch. It's a too heavy investment of my time to be spent particularly in a case my co-founder would be an unproven first-time founder/entrepreneur... or perhaps in that case I'd be the natural majority shareholder in the beginning. ;-)
Either way, to make sure you don't disappoint too many people, it would be better to test the business idea as much as possible without building anything, i.e. validate the problem and much of your solution too, if only possible.
You should probably aim to find some cash and offer a mix of small pay+good equity kind of deal.
Possible funding sources include:
- Earn it by your own work (the best way for experienced professionals)
- Get a business loan (also a really good way for beginners and often for experienced professionals too)
- Ask your 3F club (friends/family/fools... which is risky as you tend to lose something on a personal level)
Either way, I hope you get things going soon!
Congratulations on starting your startup journey! This is such an exciting time. A CTO would be a great option. But being in the beginning stages, you might not need a full-time CTO, or most likely, hiring for a full-time senior role may not be within your current budget.
Have you considered hiring a Fractional CTO? A Fractional CTO is a part-time CTO who can work for as little as 5 hours a month, but they will still have the same responsibilities as a CTO.
Looking into grants and different funding options for your company would be a great place to start as well.
I work with a team of fractional CTO who can help with road mapping, building MVP, provide support when looking for funding, and more!
The team includes experienced CTOs who have led many successful tech startups throughout their own individual careers. So we truly understand the difficulties you may be facing as a founder.
We work hard to support our clients and ensure the success of their companies. We work towards lowering the operating costs at the early stages of your journey and have quicker entry into the market.
We would love to hear more about your ideas. Feel free to book a meeting with our team or send me a message.
Best of luck!