Legal · Contracts

Template for a service agreement with equity?

Mitali Saxena

August 13th, 2015

I'm trying to hire someone with payment based on equity and money split. Does anyone have any suggestions of resources where I can get such an agreement template?

Lane Campbell Lifelong Entrepreneur

August 13th, 2015

I use Sentient Law for this kind of agreement.  Startup friendly pricing and they are masters at both Vesting Schedules and/or the Grunt Fund.  They can advise you more on what fits your needs better.

David DeMember Co-Founder at Toi

August 13th, 2015

Great resources, but I'd be cautious about giving vendors flat percentages as "stages" tend to not go according to plan and vendors will be the first to be disincentivized if/when stages run long, remember they work off hourly/weekly/monthly cash flow models. IMO convertible notes are much easier to drip a split rev/equity share with your vendor and cut it off or extend it without have to renegotiate. It also allows you to defer a (likely non-professionally-vetted) evaluation until you take funding (if you haven't already).

**Always consult an attorney before offering anything.

Mark Thoburn Founder and CEO

August 13th, 2015

This is a great way to get started from Founder Institute
http://fi.co/contents/fast#

David DeMember Co-Founder at Toi

August 13th, 2015

We've done quite a bit of these at Toi. We typically use a very boiler plate work for hire agreement and as part of the compensation, we reference a convertible note. Then we sign a separate convertible note with the client/partner to account for the equity split. We typically price the situation as if it were a cash client and then create the split based on those numbers. Part is cash and part goes in to the convertible note.

Also, you may want to read a book like Venture Deals by Brad Feld. It will give you a good run down on startup financing.

http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalist/dp/1118443616/ref=pd_sim_14_5?ie=UTF8&refRID=10JJWKHBBC6SJKAPMFEZ