I'm working on several ideas now and am trying to find a partner. But every time people reach out to me they usually ask for a salary first and then also for an equity stake.
For me, these two things go in parallel, you either start working as a consultant on a salary-basis or work on the same terms as other co-founders and get an equity skate in the project, especially in case of an early-stage idea (my case).
So my question is how do you find the right person who will be motivated not by the sort-term salary benefits but will be a co-founder of the project? Or maybe I'm wrong in my thinking and I need to both pay salary, and gran such a person with an equity stake?
You have to look at the exchange of value you are seeking. As your question is stated you are wanting someone to work with you on an idea. Nothing wrong with that, but if you don’t have a business plan, you reduce your possible interest 100 fold, because now, in most cases, that person will have to see your idea as a hot button interest.
If you come to me with an idea for a company in an industry I don’t have an interest in, and you have no business plan so now I have to guide you or write myself in half or full.to do all that on equity? I don’t have the time. So I will ask for salary and equity. If you are not asking me to build strategy that makes your company or bring in strategic resources, sure I will do that for salary alone..just not going to bring any of my hard earned contacts or resources.
If you come to me with a great business plan, and all I need to do is help create some operational strategy polish the business plan…I see a light at the end of the tunnel, so I may do that deal on equity alone with the promise of a salaried C-Level position upon financing or generated revenue.
The other challenge is man oh man, the value exchanges some of these would be entrepreneurs out there think is fair are insanely off. I have had people offer me 1% when I am telling them I will take their company to someone on the Forbes 400 or line up strategy with a firm that positions their company to make millions or tens of millions in revenue in time. Why would I risk a trip to the well for 1%?! It is insanity and no one worth their weight would ever touch that deal. You are talking 2-3% to be an advisor and help maneuver with very little time investment.
So nothing wrong with offering equity alone, but the minute you get an ego or pretend you have greater value than the person you are asking to come in and do equal if not more heavy lifting building from the ground up..thats when you can kiss your entrepreneurial aspirations goodbye and credit greed as the culprit of failure to start.
So its not a clear cut road. Open communication is key. But be ready to sign off on a contract for compensation because no one with experience is dumb enough to move forward on equity OR salary without knowing where they stand in writing.
I am always looking for great ideas. I have managed large teams, started new businesses and have enough money through other streams of revenue that I do not need a paycheck. I help by putting in the work knowing what the opporutnity is that lies ahead. Let me know if you want to connect. If I like and idea, I help sell through my many connections!
Cofounders/founders/ entrepreneurs (though they have their own meaning) don't work for money. They work on ideas, execute, grow and then look for an equity stake.
People who are looking for a salary initially, are like salaried-employees. Though entrepreneurs are also employees of the company, their vision is to grow and expand the business.
I would suggest, those people look into your vision and work and stand with you, are the best match for co-ownership.
There are over 50,000 CoFounders on the CoFoundersLab
site. The biggest place to find a coFounder is right here.
1. Find someone who has the strengths you need to round out your needs.
2. A CoFounder is like marriage. Date first.
3. Start with a project that you both agree on with a specific timeline and goals. That will give you a good idea about the working relationship and strengths
4. Do due diligence on your CoFounder.
If you're saying that a salary or equity tends to be an either/or thing - that is, that in many cases someone receives either a salary, or equity - I'd agree that is pretty common.
The best way to circumnavigate any misunderstanding, or any negotiation someone might try to engage in, is to simply be upfront about what you are offering, and what you are not offering. It sounds like you want to offer equity and not a salary. If you're hard-set on that, then, again, I think you simply have to be clear about what you're offering, and find someone who is okay with receiving equity only. But to answer your question more directly: unfortunately, I don't think there's any perfect way to find such a person.
There are people out there who aren't willing to work for equity only, some who are, and some who perhaps could be convinced. In any case it's going to come down to how you present your idea/product to them, and the value they see in it. Of course, you should be weary of anyone willing to quickly jump on board with an idea unless the value they're adding is clear to both you and them. And just as well, you should make clear what the intended end-product is, and be able to present some kind of plan to them.
For those without some kind of safety net, working for a salary is simply a necessity more than it is a short-term play. If you're looking for someone who doesn't need a salary, or isn't trying to mitigate risk by way of one, then that's another thing to be clear about. Start ups, after all, are risky territory, so you wouldn't necessarily be remiss in asking someone to take a risk. But risk tolerance will vary.
I think the most practical approach is to seek out those who have the specific type of skill set/experience you're looking for, and then pitch your idea + plan as strongly as possible, with very clear terms. You might find someone so incredible that you're willing to bend a bit, and figure out a way to pay them a salary, or some other arrangement (there aren't really any rules), just so you can team up with them.
I didn't exactly answer your question here, but maybe some of the above is food for thought, or gives you some ideas about how to better articulate what/who you're looking for.
Trying to find an employees who is also a good investor is like trying to find a quarterback who can also kick field goals.
Being an good investor is a skill - especially for early stage companies - and you will want to find a really good one.
Find an investor, and then use that money to hire employees.
Any employee who is willing to put a large percentage of their net worth into a single early stage company is likely not a very good investor.
 It's unclear what you mean by "equity stake". Even Google still does "equity stake" for new tech hires. (Individuals don't get a significant percentage of Google, but it is a significant part of their compensation.) If you're not paying market rate in cash, you have to make it up in equity and since your company isn't worth much now....
 Does "same terms as other co-founders" include equal stake? After all, they're taking the same risks....
 How do you expect your co-workers to pay their living expenses? (Why should you benefit from their savings?)
 At the end of the day, your job is to bring money in. If you can't.... (You built "GodMode" without knowing who would buy it.)