I've been working on my startup for quite some time now (over a year) and my friend, who is a designer, does somewhere between something like 30 hours of work to help out where I was lacking in some skill. No discussions or contracts have been made but I feel like its important to discuss expectations. Are they entitled to equity now?
A friend helped out my startup, are they entitled to equity?
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Re: A friend helped out my startup, are they entitled to equity?
#2Legally or morally? I would say so morally. Legally is anyone's guess but you'd be crazy to take the advice of anyone other than a lawyer on that question.
Re: A friend helped out my startup, are they entitled to equity?
#3Legally or morally? I would say so morally. Legally is anyone's guess but you'd be crazy to take the advice of anyone other than a lawyer on that question.
Because their work was temporary and they don't have any skin in the game, I feel like equity is a bit much. I was thinking some other type of remuneration instead
Re: A friend helped out my startup, are they entitled to equity?
#4Maybe equal to the cash value of the 30 hours of work. If you were to sell shares in the amount their work was worth.
But most likely you just pay them in cash & call it a done deal. Without written documents awarding equity I'd say an expectation of equity is out of line.
Re: A friend helped out my startup, are they entitled to equity?
#5Maybe equal to the cash value of the 30 hours of work. If you were to sell shares in the amount their work was worth. But most likely you just pay them in cash & call it a done deal. Without written documents awarding equity I'd say an expectation of equity is out of line.
Makes sense. If they demand equity, how would you respond to that? Are there legal ramifications? ( putting your friendship aside.. )
Re: A friend helped out my startup, are they entitled to equity?
#6Maybe equal to the cash value of the 30 hours of work. If you were to sell shares in the amount their work was worth. But most likely you just pay them in cash & call it a done deal. Without written documents awarding equity I'd say an expectation of equity is out of line.
Makes sense. If they demand equity, how would you respond to that? Are there legal ramifications? ( putting your friendship aside.. )
Then I'd say at the very least the friendship's over.
You might look into hiring an attorney to defend yourself, but I wouldn't worry about it too much since their demand wouldn't have a legal leg to stand on being that there was never any written or signed agreement stating they were due any equity.
Let them sue you & lose I guess.
But then I'm no attorney, so don't take my word for it.