I currently employ a senior engineer full time @ about $2,000/week. He is very strong and I would like to offer him equity in exchange for his fees (until we raise seed, at that time he will start getting salaries again).
My startup is already generating revenues albeitde minimis, but nonetheless revenues, so it's not at a micro stage. I've also recently secured a major partnership plus strategic pre-seed funding so his risk coming in at this stage of the company has been reduced. In light of this, my bid to him was 20% equity in return for no salary until such time as we raise seed funding. After a few back and forths, his final ask was 25% equity ownership with the caveat that he hired someone under him (that he's already identified). He (the senior engineer) will work for free and still taking on other freelance jobs, while I would be responsible for paying his hire market rate.
I just can't accept this deal. The point of offering equity was so that I can forgo paying salary until we raise seed.
What would be a reasonable counter to his ask?