An easier way to respond to equity based web development requests

I recently received (another) equity based request for my services. We all get them from time to time, some more than others. This one was based around (reluctantly) giving away a small piece of equity in an idea in exchange for developing it all for free. Not something i’m very fond of doing unless I truly love the market they’re getting into (gaming, advertising, tv, films for example) or it comes with convincing financial statements.

Here’s the straight forward and simple reply i’ve put together which was used in this situation (and will be used in similar future situations):

Thanks for getting in touch. I’m afraid I don’t work in equity situations that value the idea more than the person putting it into execution. Thanks for getting in touch, but i’m not interested in this case.

Good luck with the idea, I hope you guys make it a great success :) Feel free to send me an e-mail rubbing it in if that’s the case further down the line.

There are several reasons for the language in this e-mail:

  • bold statement to declare i’m not interested because it is undervaluing me
  • making sure it ends friendly and opens up for witty banter
  • making sure there’s an opportunity for myself to be ridiculed if the idea becomes a success later down the line

If you’ve responded to similar requests or have an e-mail that you yourself use in this situation i’d be happy to hear from you and discuss your experiences in the comments below.

12 Responses

  1. Matt Hill

    Interesting approach! I can see that this could go either way as you’re treading a fine line between getting your point across and being perceived as being rude.

    I’m curious to know what kind of reply you received?

  2. Jonathan Ellins

    You’d be crazy to take on a job for a ‘chance’ of a good idea that ‘may’ make a lot of money in the future (if they share it).

    If it was really a good idea then surely they could get a loan or backing :)

  3. Tim Ruffles

    Totally agree with the philosophy, but it might come over as a bit sharp. Everybody with an idea thinks they’ll be doing you a favour, maybe send them a couple of links to educate them in why they should value execution above ideas – http://www.oreillynet.com/onlamp/blog/2005/08/ideas_are_just_a_multiplier_of.html

  4. jazi

    Comes across a bit curt. Of course it depends on what they sent to you initially.

    I’m not all up for equity shares system (unless done with mates) but if they really do think their idea is ‘all that’ then my preferred thinking is

    ‘Well, okay. You think you have a great idea & I agree. So let us both risk something. I’ll do the work and you pay me a discounted rate – THEN from my share you can claim back that ‘advanced’ payment once the money rolls in’

    This seems fair – you get to eat while working on the project and they risk something. It also encourages them to get their act together when it comes to marketing the product/service/site.

  5. Ben Hayes

    I like it. Sharp and to the point. I don’t think anyone will be really offended.

  6. Rob Scott

    I think it makes sense – there’s no point suggesting you want an equity deal if you don’t. Set your stall out. Actually convinces me you could be the right person for one of our projects! Email sent.

    Rob

  7. David

    Simple and informative! Nice response, I cant imagine they would be too offended.

  8. Ben

    Hi Guys,

    Funnily enough I strayed across this blog whilst looking for a web developer willing to exchange hard work and expertise for a share in the action; assuming there is any of course.

    My view is that it could be the highest paid work you ever undertook. Surely you should explore the idea; suss out the person seeking assistance and then maybe strike a deal if it looks viable. A blanket no is perhaps slamming the door in your own face.

    Instead how about a questionairre that asks the potential chancer/genius entrepeneur some searching questions that gives you real insight into both the character seeking assistance and whether their idea has merit.

    At the very least you should be able to steel the odd good idea :) (Please forgive my horrendous spelling..it’s genetic)

    1. Christof Coetzee

      Ben I also agree with your sentiments, but like I mentioned its not always that easy for us developers, on the one hand we have to put in a certain amount of revenue generating hours per day, on the other hand we would love to be involved in a passive income venture, which again might also take a very long time before it yields financial results.

  9. Kevin Taylor

    As an entrepreneur it took me an age to find a programmer to develop my web app – In order to get the right programmer I had to offer a combination of a small upfront payment and equity share. But after a year now, it’s all starting pay off. So programmers don’t be too hard on us entrepreneurs.

  10. Timmy

    Offering equity in return for work is simply offloading the risk of the endeavor to the developer. If you believe in your idea you should be willing to risk your cash on it.

  11. Christof Coetzee

    Jamie, I loved your response to these types of requests :) However as a freelance developer myself I’ve had some great offerings in the past and its not always easy to let them slip by… passive income is always something we aspire to, but still need to earn our bread and butter on a daily basis – difficult juggle.

Comments are closed, but feel free to @jhuskisson on Twitter with your thoughts.