Want to get equity in a startup but not ready to spend money on it?
There are ways to do it without cash:
1. Advisory fee, consulting, mentorship
If you do marketing, strategy, executive coaching, or have specific knowledge in the market or technology they need but your price per hour is too much for them, you can get equity instead.
Important: try not to enslave yourself for eternity.
Bad: 2 hours per week for as long as the startup exists.
Good: 2 hours per week for 6 months.
2. Technical partner
If you run a software development shop and have underutilised resources, you can take equity for developing an MVP or the first version of the product.
You can set a cap on the amount of resources you allocate for this project, but try to be as flexible as possible. No one knows what the product will be after all the pivots that are ahead.
3. Media for equity
Big media companies use this to trade the traffic they can’t sell at a ridiculous price for equity in startups that won’t take off.
But if you have a loyal audience in a very specific narrow niche, you can provide access to it for a startup.
4. First sales, client or partner intros
It takes weeks or months, sometimes years, for a startup to get through to the corporate exec they need.
If you have a good network, you can spare them this time and make entry into their target companies smooth for both parties.
This is probably the easiest way to get equity. There’s a very specific commitment: you get them a deal, they issue shares for you.
5. Finder’s fee: fundraising
Like previous, but you make intros to investors, not to the clients or partners.
You may commit to raising a specific amount of capital or just take a fee from every successful intro.
Throw in some of your own money and you become a lead investor.
Investing is not always about money.
Sometimes it’s better to start working with a company, get to know each other before commiting funds.