Equity, tokens and working for free

Ten years ago I used to get offered equity to work for free, now I get offered tokens in upcoming ICO’s. I used to say yes to many equity offers if:

(A) I liked the project

(B) I liked the people

As you can imagine most of these projects never went anywhere. I’ve now got many 1% shares in imaginary companies that no longer exist. I’d hazard to guess many ICOs are also going to end up as Imaginary Cash Only.  So should you accept such an offer from some cool people? Well, it really depends on why you’re doing the work. If it’s for experience, then why not? Think of it as part of your ‘free education’ in industry XYZ. Many of the most valuable things I’ve done in my career started out in the free zone.

My approach today however, is a little different. Here’s how a decide whether or not to work for non cash payment:

If I wouldn’t invest my own money in that startup or activity, then I wont accept non-cash payments. Why – because they are essentially the same thing. We are handing over money to the project or company.

Another thing worth considering is why the person on the other side of the equation would give away equity for labour. If they truly believe in their project, why are they so eager to give up equity? It’s certainly worth asking them that question.

In my experience smart entrepreneurs ask for money, not free labour. Especially when money follows good ideas, strong teams, and that managing free labour adds friction and complexity to the project or startup itself.

Your work is worth more than you think, Steve.