"Would you build it for equity?" is the question every agency hears and most agencies dread. The dread is rational: badly structured equity deals combine the worst of both worlds — agency economics with venture risk. But structured well, software-for-equity is the most honest engagement model there is. It's the only one where the builder's payday depends entirely on whether the thing works.
The core discipline: one estimate, two currencies
Every equity deal we do starts identically to a paid engagement: a scoped, milestone-priced estimate at our normal market rate. That number is not a negotiating posture — it's the same figure a paying client would sign. Only then does the currency conversation start: does the founder pay it in cash, in equity, or in a mix?
This ordering matters because it separates two questions that ruin deals when blurred: what is the work worth (an engineering question) and what is the company worth (a market question). The build value is ours to estimate; the valuation is yours to defend — ideally with a recent round or an advisor-backed number. The equity stake is then arithmetic, not arm-wrestling.
Build value ÷ valuation = stake. Everything else in the deal exists to keep that formula honest.
Why hybrid usually wins
A full-equity deal — the entire build for ownership — is the headline structure, but it's the rarer one. Full equity concentrates risk on both sides: the founder takes maximum dilution, and we take maximum exposure to a single outcome. It's reserved for the strongest theses, where our conviction is close to a founder's own.
The hybrid — you pay under price, the discount converts to equity — is what most partners choose, for good reasons. Cash covers our cost base, which means the engagement doesn't compete with paid work for staffing. The founder's dilution stays modest. And crucially, both sides keep skin in the game at a proportion that matches their conviction: the deeper the discount, the bigger our bet.
Vesting against milestones, not time
Standard startup vesting is time-based because employees contribute continuously. A build partner contributes in shippable increments — so our equity vests against delivery milestones instead. Ship M1, vest the corresponding tranche. Miss it, and the unvested equity stays with the founder. It's the same accountability we sell in paid work, applied to ourselves, and it's the clause that most reassures later investors during diligence.
What we say no to
Ideas without distribution — we build products, not audiences. Valuations that require believing three miracles. Cap tables that need archaeology. And any deal where the founder wouldn't take their own terms if the roles were reversed. A good equity deal should read like a boring contract wrapped around an exciting bet. When it's the other way around, walk.