Consultants: What's Your Preferred Compensation in This Situation?

It would really depend on the startup and what you bring to the table.

For example, are you helping them find investors? Are you overseeing their marketing efforts? Hire key members and train personnel? Make important connections to jump-start their efforts? Your value rests solely on how much you'll help them make or break the company's first year in operation.

And if you don't know the answer to any of these questions, then your value to them is effectively zero. So figure out what you can deliver, what impact it will have on their survival, and base your ask on the company's relative value today.

Most startups fail, so unless you want to go gambling with your time then by all means. But I personally like to actually get paid for my hard work.

If you have no confidence in the startup and its principles, then what are you doing there?

Go down to the Offline subforum and ask there. You'll get answers from people who run real businesses.

OP, get compensated the way YOU want to be compensated.

Get covered for your time. Get in on equity or a % of gross. Do both. If you're serious about this, believe in the idea and the people, then embed yourself in the organization.

Make it difficult for them to dislodge you later.

Because when things DO start going good, they will try to cut you loose so they can keep a bigger piece of the pie.

I worked for an Inc. Top 1000 firm that during the startup phase had sales reps go develop relationships and repeat business contracts. Those repeat contracts paid out $10,000+ a month to those reps, month in, month out.

One day one of the owners was bitching to me: he resented those reps getting that "easy money" without having to do any more hard work. As soon as he was able, he would cut them out of those contracts.

That's gratitude for ya.

It'll be you next. Don't think otherwise. Get embedded and protect yourself. See an attorney about your contractual arrangement. Whatever the fee is, first, it's a tax write-off, and second, it'll pay for itself many times over if the startup does well.

I'd want a set fee. I'm a cynical old thing, but many start-ups don't make it, and a percentage of nothing is nothing.

However, if you feel strongly about what they're doing, and believe it's the next Google, request equity instead. But be careful.

Upfront fee. I would hate to on a percentage of gross plan if the startup goes nowhere lol.

Plus.... at least you know for all your hard work as a good consultant you've already gotten paid for all your services.