My friend is part of a consulting agency that wants to develop their own product idea (cross-company surveys, dashboard for insights). They're already generating about 900k a year in revenue from consulting fees (which is 90% operating profit).
They're basically looking for an engineer to build an MVP, which they can then iterate on + learn from in order to build a fully fledged product that they can go out an sell to their existing clients. It's definitely a risk, but the fact that they already have relationships with these clients makes it a lot less risky.
My main questions is about how to get compensated as a freelancer and how much risk I'm willing to take. On one side, I don't want it to be based fully on equity. Too much risk and I'd be taking on most of it. At the same time, I don't want it to be all cash compensation: If this works out, I want to have equity in the business and get a constant profit stream from the product (which is what we've talked about).
Curious if anyone has any good templates for this or specific suggestions?
I'm mainly looking for something that: - Is not structured around full time employment, but instead freelance type work - Is structured around shares with profit sharing (with yearly payouts) - Has a good balance of risk (cash vs equity)
