“ACCEPTING EQUITY IN PAYMENT FOR SERVICES RENDERED OCCASIONALLY WORKS OUT, BUT MORE OFTEN DOESN’T… “
“The Devil often Wears Entrepreneur” (Phil Friedman)
Apt insight – and timely – as we enter a “sharing economy” which includes significant doses of off-the-grid barter, smallscale entrepreneurship (like airbnb -I’m a host – and uber), as well as a questioning of ‘the social contract’. Not to mention the antics of The ConMan-in-Chief.
The JiveMasters will always be with us AND the seductive lure of an ‘ownership stake” is always compelling.
So … Yep.
Me, too – under the rubric of “garage band / business with friends”. The mid-80’s was my ‘two guys in a loft” adventure, with all the trimmings… It was very early on the curve. We played with theBigBoys and did some hyper-interesting, visionary, fairly cutting-edge shit in the period “before we called it the Web“. Our glorious failure stressed the hell out of our friendship, but I wouldn’t have it any other way.
There’s truth in the distinction between equity as ‘minority investor’ or ‘ownership stake”
I guess the sort-of point of my anecdote was to describe the gradualism implicit in a business venture that grows out of business-with-friends.
my First Equity Adventure
Bill and I met as employees at a cable TV production studio in NYC- and became friends. He was the Audio guy. I was Lighting and Set. We both had decent video production skills (camera, editing, direction). We felt that there was a nice complementary/supplementary ‘fit’, in terms of personality, professional skills, and talents.
This was as the startup microcomputer + digital + online industry was emerging (late 70’s). I completed a graduate program in “Interactive Telecommunications” just as the nascent digital interactive industry started getting its corporate legs (1981).
As one of the relatively few people with leveragable make-it-real digital production skills, I was fortunate to be called upon to implement a lot of the early speculative visionThing work.
There were few people who ‘got it’ at the time, but Bill was definitely one of them (plus, he had skills) – and so I included him on several engagements. We were able to crank out some solutions, we talked the same language, and it was fun.
This ‘first wave’ of digital interactivity in the early 80’s turned out to be an exciting, well-funded failure itself, but it was also obviously theFirstWave of the tech tsunami to come: (Before We Called It the Web). In any case, I saw Opportunity, both as a service bureau and as a solution provider : Implementation services in a speculative environment was one part of it, but Let’s talk software.
I was the nominal ‘front man’ for our little team:
- the graphical-talent-that-clients-buy
- the marketeering song’n’dance man who makes the sale
- the presentational articulator of theVisionThing
- the conceptualizer of the Solutions Suite
Bill was brilliantly supportive as designer, programmer and conceptualizer. He provided cogent strategic insights.
He grasped – and learned – both the underlying technical code and functional programming. He turned the concepts into workable (and salable) software products
But Bill also actively eschewed the outward/client-facing aspects of the business.
Bill and I spent endless hours kicking around what our working relationship should and could be. It was often awkward and painful. The environment was speculative and entrepreneurial and that first wave of interactivity proved to be a premature business failure. Our powerful friendship was tested and – I think – even damaged, as a result.
To the point:
In the years since I’ve (fairly) often been approached by entrepreneurs offering Equity-as-compensation. All the things which Phil wrote about the strains of the seductive promise of equity are true – and kudos to him for re-stating them. I’ve also had a taste of the whole equityThing from the other side – and it’s bittersweet. Just sayin’
I must emphasize the tremendous positive impact that Bill had on ideas and products that were nominally ‘mine’ – because I’m the guy who put them into print, or a product, or whatever. Collaboration’s like that: Both invaluable and – in many ways – immeasurable. Also undeniable (unless you’re a lawyer, but don’t be). Ideas rarely have identifiable boundaries. But that’s another rant.
The dynamic’s the thing. Compensation is just logistics.
And logistics is a bitch.
© The Communication Studio LLC