Is it possible the company may not have more than 6 months of runway? 1000 hours couldn't possibly be a well-scoped amount of work. You're not being given the security or compensation a full-time hire deserves OR the finite scope a contractor deserves. Even if you believe in the company and think the 5% is/will be worth something, consider what specifically you're being asked to do and be very clear with expectations. I'd also break up the agreement into smaller projects, with both cash and equity if you want equity, so that you have the opportunity to part ways on good terms instead of an all-or-nothing equity lump.
Ask HN: I've been offered 5% stake in a startup. What should I think about?
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Re: Ask HN: I've been offered 5% stake in a startup. What should I think about?
#22Before you even consider the %, there is a much more important question:
Do you believe in the startup? And if you do, do you believe that there will be a market for the 5% stake you get.
A "no" to either question suggests that you should work for the money and not the equity.
Assuming the answer is "yes" to both, what are the terms under which you can unload that equity later on?