Equity

[Phillip Vector]

Just curious about what people think.. Would you ever work for equity
in a company? Why or why not? What guidelines would you put in place
if you were to?

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[Wil Genovese]

During the dot-bomb phase I worked for shares of stock.

I have 13,000 shares of one company that no longer exists and 72,500  
shares in another that does not exist.

I'm not sure if these times are much different.


Wil Genovese

One man with courage makes a majority.
-Andrew Jackson

A fine is a tax for doing wrong. A tax is a fine for doing well.

On Jul 7, 2009, at 12:54 PM, Phillip Vector wrote:

>
> Just curious about what people think.. Would you ever work for equity
> in a company? Why or why not? What guidelines would you put in place
> if you were to?
>
>

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[Alan Rother]

It's a big gamble. I think the most important factors are:

   - How much do you believe in the idea?
   - How much do you believe in the people running the company? (I've seen a
   lot of great ideas run into the ground by people who just don't know what
   they are doing)
   - How much is your time worth to you?
   - How much free time do you have to spend on this project?
   - What are you giving up to work on this project?
   - Are you a gambler?
   - What's the likely payoff if the project succeeds?
   - What's the projected monthly/yearly revenue for this thing you are
   building?
      - How much of it would you get?
   - Is there a solid business plan in place or do they just have an idea?

The simple fact is, most new businesses fail. They most commonly fail
because the core idea wasn't well thought out, there wasn't a solid business
plan or the people in charge simply didn't know what they were doing. Even
the best ideas may not work because there isn't a big enough market for the
idea, too much existing competition, or a general lack of willingness for
people to pay for a product.

However, if you have the time and the skills and nothing better to do it
might be worth a shot. If nothing else, you might learn something new that
helps you later in life.

=]

--
Alan Rother
Adobe Certified Advanced ColdFusion MX 7 Developer
Manager, Phoenix Cold Fusion User Group, AZCFUG.org


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[Dave Watts]

> Just curious about what people think.. Would you ever work for equity
> in a company? Why or why not? What guidelines would you put in place
> if you were to?

I think this is an inappropriate question for a technical list. I
think you would be better served by posting this to cf-community.

Dave Watts, CTO, Fig Leaf Software
http://www.figleaf.com/

Fig Leaf Software provides the highest caliber vendor-authorized
instruction at our training centers in Washington DC, Atlanta,
Chicago, Baltimore, Northern Virginia, or on-site at your location.
Visit http://training.figleaf.com/ for more information!

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Unless you have an absolutely compelling reason you should not do it.  It is
a two edge sword and it makes projects hard to walk away from as well.

Only one group of folks have made money in a predictable way on the web -
consultants (and porn vendors but I'll leave them out as a matter of
principle). Everthing else is pretty much a lottery ticket :)    

Before you go and do this you need to take the time to discover

- The financial situation of the company.
- Who are the backers and what is their skill set.
- Do they have a marketing plan or are they just hoping the web will "catch
fire" and make them the next facebook.
- Are they realistic? Most brick and mortar startups plan for 18 to 36
months to reach break even.

Most Internet startups have moved toward the internet because it is the
largest get-rich-quick culture dish in the world. It has a reputation for
being a "cheap way" of starting a business (which is a terrible reason to
choose it). Yet there are thousands of failures for every one success.  

Check out this post I wrote some months ago. I'm presenting an expanded
version at the chamber of commerce here in Omaha in a couple of weeks.

http://www.coldfusionmuse.com/index.cfm/2009/1/23/Great-Expectations-What-Ma
kes-Money-on-the-WEb

What most folks need is a reality check. Most startups are populated with
folks who are all drinking the coolaid and without a naysayer in the bunch.

Having said that I suppose no great ideas would never be birthed without the
visionaries (and crackpots) who give it the old college try :)

Anyway that's my 2 cents.

-Mark


Mark A. Kruger, CFG, MCSE
[phone] ext 105
www.cfwebtools.com
www.coldfusionmuse.com
www.necfug.com

-----Original Message-----
From: Phillip Vector [mailto:vector@...]
Sent: Tuesday, July 07, 2009 12:54 PM
To: cf-talk
Subject: Equity


Just curious about what people think.. Would you ever work for equity in a
company? Why or why not? What guidelines would you put in place if you were
to?



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[Cameron Childress]

On Tue, Jul 7, 2009 at 1:54 PM, Phillip Vector<vector@...> wrote:
> Just curious about what people think.. Would you ever work for equity
> in a company? Why or why not? What guidelines would you put in place
> if you were to?

I would ask these three questions of yourself:

Do you believe in the people who control decisions in the company?
Do you believe in the company's product/service?
Will you be a decision maker able to directly effect the success or
failure of the company?

If you answer "no" to any of the above questions, I would ask for a
paycheck, not equity.

-Cameron

--
Cameron Childress
Sumo Consulting Inc
http://www.sumoc.com
---
cell:  678.637.5072
aim:   cameroncf
email: cameronc@...

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[Judah McAuley]

I'd generally avoid equity only deals. In my experience the people
that are proposing those sorts of deals to major developers also don't
have the money make the business succeed once the product is built. If
they don't have the money to pay developers to build their dream then
either they don't have the confidence to spend the money they do have
or else they don't have the ability to explain their dreams to the
point of being able to attract sufficient investment. Both reasons are
indicative of a high liklihood of business failure even if the
product, once built, kicks ass. Good products are not sufficient for
good business.

That being said, equity in a company as part of an overall package is
quite a different matter. Major players should all have some skin in
the game, as it were. Financial success should follow from business
success and the primary folks involved should all have something to
gain from busting their ass. If you are being brought in early and
asked to "invest" in the company in the form of structuring part of
your compensation in the form of an equity stake, that could be
reasonable depending on the people involved and the structure. Being
asked to do it for free in hopes of some nebulous future financial
glory on the other hand should be a non-starter. People don't value
what they get for free and you'll likely end up bitter and unhappy.

Judah

On Tue, Jul 7, 2009 at 10:54 AM, Phillip
Vector<vector@...> wrote:
>
> Just curious about what people think.. Would you ever work for equity
> in a company? Why or why not? What guidelines would you put in place
> if you were to?
>
>

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[James Holmes-3]

Or cf-jobs-talk perhaps.

mxAjax / CFAjax docs and other useful articles:
http://www.bifrost.com.au/blog/

2009/7/8 Dave Watts <dwatts@...>:

>
>> Just curious about what people think.. Would you ever work for equity
>> in a company? Why or why not? What guidelines would you put in place
>> if you were to?
>
> I think this is an inappropriate question for a technical list. I
> think you would be better served by posting this to cf-community.
>
> Dave Watts, CTO, Fig Leaf Software
> http://www.figleaf.com/

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[Judah McAuley]

cf-community, perhaps. One of the problems with the HOF lists that I
have mentioned to Michael (bless his soul for all the hard work he and
Judith put in for the griping of folks like myself) is that they
fragment way too easily and the specialized lists get started too
early and die before they have a chance to live. cf-jobs-talk...a
great bit of taxonomy but an utterly useless real life list. It just
does not nor will it have the traffic to sustain it.

Yes, cf-talk is a high volume list compared to many (though lower
volume than some as well). That is its curse but also its savior.
People look at it because it covers a broad swath of subjects. Because
a lot of people look at it, it attracts questions of a wide variety.
See the lovely loop there? Any given question may appeal to a
relatively small subset of the list membership. But the list
membership is diverse enough to provide someone interested in most
every question. Technology has advanced to the point where it is
relatively easy to ignore threads we are not particularly interested
in, making superficial reading of the list fairly low cost and
efficient.

There are some more specialized lists which may be of sufficient
interest to generate a higher ratio of signal/noise for the members of
those lists. That's great. However, those lists will come about
organically. Michael likes to start lists early and hope they turn
into self-supporting ecosystems. That's great. I like the idea of
suggesting to people that more specialized lists exist, especially
when there are likely to be repeat, indepth discussions that should
take place. In this case, however, no list exists within the HOF
umbrella that honestly addresses the posters question.

I just don't want to see people discouraged from posting a real
question to a list with people who have applicable experience and who
pay attention. Enough people have already responded to this question
to show that it is of interest to the list and I hope that we do not
become too myopic in our view of what subject matters this list should
address.

Cheers,
Judah

On Tue, Jul 7, 2009 at 6:02 PM, James Holmes<james.holmes@...> wrote:

>
> Or cf-jobs-talk perhaps.
>
> mxAjax / CFAjax docs and other useful articles:
> http://www.bifrost.com.au/blog/
>
> 2009/7/8 Dave Watts <dwatts@...>:
>>
>>> Just curious about what people think.. Would you ever work for equity
>>> in a company? Why or why not? What guidelines would you put in place
>>> if you were to?
>>
>> I think this is an inappropriate question for a technical list. I
>> think you would be better served by posting this to cf-community.
>>
>> Dave Watts, CTO, Fig Leaf Software
>> http://www.figleaf.com/

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