It’s more than that actually. Bear in mind that an equity offering has already got to have some value to be worth anything. If it is a brand new company, or worse, just an idea, with no empirical verification, the current value of the company and the idea is zero dollars/pounds, point zero-zero cents/pence! Any equity percentage you get is zero.

In addition, most startup companies fail. About 90% within 2 years. Hence, you’re taking an equity stake of zero and the chances are, it will result in absolute waste of time and energy.

Let’s put it this way, the person who asks “What’s it gonna take? A few weeks?” is the worst person you can ever get into a joint venture with. To understand why, you just need to understand this reply. A few weeks of your time, if you worked for a company (or contract) is £X. The founder has to guarantee that the time invested by you has to at least recoup itself in that time, so that you can sell your equity stake to him on the last day of your ‘few weeks’ at a price that’s the same, or more, than you would earn doing your usual job. That’s business acumen. If that person doesn’t understand that, they have no business acumen, period!

Remember, at the moment, the person’s idea is worth zero. Now you’ve established they also have no business acumen.

…Run, now, far, fast!

Written by

EA, Stats, Math & Code into a fizz of a biz or two. Founder: Automedi & Axelisys. Proud Manc. Citizen of the World. I’ve been busy

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store