At the same time Twitter, Facebook, YouTube, etc were created, probably 100 other people had the same idea but weren’t able to pull it off as effectively.

During our initial years we got a lot of these type of equity sharing requests, and we discounted prices for a few of them. The outcome was always bad. Now we politely turn these down and let prospects know that we are focused on our own business.

I heard this somewhere and its hard to not believe in it – How can someone ask us to invest our time and money paying my team to build on an idea that the client themselves don’t want to invest in.

In my humble opinion, an idea is only an idea until its profitable, then it becomes a business.

I wouldn’t half ass my concept by paying someone $500 to put it together. Do it right and find the right team with experience in building profitable businesses, not simply websites.

Thanks!
Gaurav

The big reason most of these are not tempting to me is that they are simply lame ideas, or “me too” ideas. No, I do not want to program the “facebook of realestate brokers” or something… Realestate brokers already have 50 sites for this, including facebook. Here are the other big reasons, mostly having to do with how you ask.

First, there are 3 options, Fast, Good, and Cheap, and you get to pick 2. Usually “work for free” falls under the category of “cheap” and usually I don’t like to sacrifice “good” – I have a reputation to uphold – so I will not give these kinds of projects priority. However, usually the owners want it yesterday and feel like their promise of money is as good as a check I can cash, and they are entitled to be very demanding. Don’t do this – it will upset your programmer.

Second of all, many of these offers come with no documentation or copy of the business plan, but do come with an NDA attached. Some also request a proposal. Why should I propose work and estimate it’s value when you’re not offering me money or a copy of your plan of when you are going to make money, let alone when I get paid. A request that comes in and says, “we can pay you after we get paid, and that’s going to happen by this date…” is a lot more attractive.

Third, explain to me upfront how much of the company you want me to own, and if it changes, how and when? After a certain number of hours?

Finally, there’s never a fall back position, i.e. if we’re not profitable after a year, we’ll give you a small compensation for your time – say 25% of the standard rate, and buy you out. That way I’m free and clear and I didn’t throw work and time into something that failed.

I’m not cynical and jaded – maybe I sound that way – but I do see a lot of offers for this. I speak as a person who has rejected a lot of equity deals, and is currently involved in a very nice one.