Should you take equity in lieu of cash?
Here is a reply to a post by Michael Zipursky over at Consulting Success, where Michael discusses the pros and cons (mostly cons) of accepting equity or shares as payment for services.
Either way, both Michael and I do NOT recommend this.
I completely agree! Never took stock, nor did I ever agree to work for free on proposals, with the idea that I would get the business if the company won the project (sometimes suggested by defense contractors.)
If asked, I simply explain that I’m too small to carry anyone for free. Better to pursue paying jobs than to lose opportunities being tied up with freebies. Besides, if they really need you they will find the money.
While I have a soft spot in my heart (or maybe my head) for startups, I’ve avoided them and pursued Fortune 1000 clients instead. Even then I’ve been burned (bankruptcies), but only twice in 28 years. Great post!
As a new consultant, you will run into this sooner or later, particularly with smaller firms. Some are strapped for cash — probably not good clients anyway. Others may be testing you — assuming you are hungry for business.
Neither are a good deal. Better to focus your time on real paying prospects.
Remember, you are a professional, just like your dentist or doctor. Very doubtful they would go for this either.
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