would you work for stock/shares?

[woopwoop]

I was reading an article a while ago how this was pretty big during the boom and wondered if there is anyone from AD who still does this. (ie. offering their time and skills on a project in return for a % ownership of the project/domain/business)

I have many names that I really like, even active websites that are no where near their potential - as a wise man once said it's better to own 50% of something rather than 100% of nothing (or even a good domain that's inactive!)

 

[rob]

Interesting question , I was offered something similar a few months back when a domain stock market was proposed. Personally I thought the idea had too many core holes to make it fly so was out.

It may be better to have 50% of something than 100% of nothing, but certainly better to have 1% of something for sure

Taking it to the domain names element, it depends on the quality of domains. Often domains have value to an end user that cannot be enhanced eg. Acorn.com would not increase its worth to Admin if it had a great info site about trees / nuts etc thus development can be a negative step.

Personally I see development skills as a comodity so I would favour the organic route to growth over splitting off %ages.

 

[GreyWing]

I have something similar planned with a certain member on here. It can be done if the right 2 people get on and are in agreement on most major things.

So yes mate it does happen.

 

[deconstruction]

i have done this before and it can work well if you have the right people , and get everything, i mean everything agreed in advance

 

[retired_member3]

It's something I would consider if it was a top domain. Same as I am up for investing and buying a domain if someone has a great site idea.

 

[Aotearoa]

This is something I would consider for the right project, but my skill set is fairly specialised so doesn't lend itself well to the creation of standard websites.

My attitude is you'll never get rich selling your labour for an hourly rate. Sure you can be comfortable developing websites for a fixed price or on an hourly rate, but no matter how well the website does you'll only ever get that up-front payment.

From a developers viewpoint if you're offered the chance to get a share of the profits from the website you have the chance to make it big. You also have the chance to make nothing at all from your work.

We all know that a high percentage of business start-ups fail, and web based businesses have an even bigger failure rate than traditional businesses. I don't know the exact numbers, but let's say 1 in 20 survives to make a profit. This doesn't mean that you shouldn't go into this type of business, but it does mean that you need to do two things:

• You must believe in the business. You must feel it has a reasonable chance of success.
• You negotiate a share large enough that your rewards if it succeeds in a moderate way will be large enough to cover the costs of your investments in the other 19 businesses you've invested time in that failed.

I add a third thing myself, the project has to have a unique selling proposition that would be hard for others to cheaply duplicate.

You have the domains & are looking for a developer so the situation is the reverse. You'll need to offer the developer a sufficiently large share of the business to cover the prospect that they don't succeed. You'll need to sell the developers on the potential for the site. You also have the problem that if they don't do the world's best job they still own a piece of the action.

 

[stevebrowne]

I have a live site working this way currently. I wrote, maintain and update the site. the other party does the fee paying work that the site manages and I get a cut of everything that goes through.

It's a risk, but you just need to manage that risk.

 

[woopwoop]

You'll need to offer the developer a sufficiently large share of the business to cover the prospect that they don't succeed. You'll need to sell the developers on the potential for the site. You also have the problem that if they don't do the world's best job they still own a piece of the action.

The bit in bold is the bit that I find the most difficult to get a grasp on.
I think that there would need to be specific points in a contract regarding what is expected, and how it can be measured.


I have a load of domains that I would love to start developing with a partner but the 2 that immediately jump to mind are:
Student Books / com
London Student / co / uk

The latter is active but is vBulletin that I used mods with and even started messing around with when I was learning PHP - it really needs a revamp. Plus I think there's potential to do so much more with it. Site needs to be designed better, and capitalising on more ads or even the database.

The first domain above is blank but I've had a bunch of really good offers. I'm so reluctant to sell because of the ideas I have.


It's great that so many of you have replied to this thread, and would be nice to hear other people's success stories, or problems you've encountered.

(also if anyone has skills to offer and is interested in getting involved with one of the projects above, PM me! I have lots of other projects too )

 

[Aotearoa]

The bit in bold is the bit that I find the most difficult to get a grasp on.
I think that there would need to be specific points in a contract regarding what is expected, and how it can be measured.

You're right, it is the hard bit. You aren't just hiring someone to do a specific job, you are looking to develop an on-going partnership. This means that you need to set up a framework that is not only going to be fair to both sides, but is going to keep the developer enthused about the project so they are going to make ongoing improvements to the site(s).

There's a big difference between the quality of work done by someone who is going through the motions, doing just enough to satisfy the contract & someone doing their best because they still believe in the project.

Have you ever seen the TV show Dragon`s Den? When they choose to invest, the investors there obviously want to do the best deal for themselves, but they are also careful to leave enough of the company to the inventors to ensure that both sides keep their enthusiasm for the project. They are also very interested in what the exit strategy is. What happens if the business is sold? What happens if either side wants to pull out of the project?

You and the developer need to consider these points as well. What if the website is sold? How do you decide when enough effort has gone in and it's a failed project you should both walk away from? What if one partner wants to pull out & the other wants to continue?

 

[Joe Davison]

In my experience, partnerships are problematic more often than not. If there's any other way you can structure the deal, do it. If you must share equity, use any split other than 50/50. Someone needs to have ultimate decision making power, or you can wind up in a stale mate, which is good for nobody.