equity-for-services-exchange

Vocabulary Word

Definition

The term 'equity-for-services-exchange' involves giving part of a company's equity, a little like a slice of a pie, to someone in exchange for their services. It doesn't involve cash payment but is rather a long-term financial agreement.

Examples in Different Contexts

In consulting, consultants might work with new companies on an 'equity for services exchange' basis, particularly in strategic planning and development. A consultant might note, 'Accepting equity for services allows me to deeply invest in the company's success, providing strategic advice without immediate payment.'

Practice Scenarios

Legal

Scenario:

It's a very promising business, but they're struggling to cover the cost of legal services. Perhaps there’s a reason to reconsider our usual terms.

Response:

Maybe we could explore an equity-for-services-exchange. It aligns our interests with the client's and could result in a big payday down the line.

Startups

Scenario:

We've drafted a great business plan, got the prototype ready, but cash is still tight for hiring. We might need to think creatively about how to bring in the right talent.

Response:

What if we offer equity-for-services-exchange to potential hires? It could attract motivated professionals who are confident in our vision.