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Equity for a startup

Hello,

I’ve been freelancing as a Bubble developer and helped a client build software with Bubble. I think I made a huge mistake in charging hourly, since I recently figured out that they raised seed funding earlier this month. And the article said it was from four unicorn founders and a billionaire. They started in July last year and have grown to 30 employees now. I started building the core software in October and am still working with them today. But mainly it’s just small edits / bug fixes now, so I’m only working part-time on it, while others in the company are working 24/7 it seems. Since I built the entire software myself, should I ask for equity in the company? If so, how much and how should I approach asking? I did also see that they’re hiring for a Java technical lead, so I’m guessing that it’s a matter of time until they’re going to rebuild the platform outside of Bubble to scale.

Also, how much would the software be valued at, based on what they raised? Would it be 2-3x what they raised? Or is that not even relevant?

Difficult to answer. If you believe in the idea you’re implementing for someone, so you can try to get a commitment / option in terms of additional revenues in case the solution is launched and generate revenues for them.

It also depends on the way you’re working with them. Is the scope of your work clearly defined at the beginning, or are you working in a agile mode with demos ans progress/scope reviews?

The time & material model is OK when you and they don’t know what will be the outcome of your work. So the hourly rate is adapted.

Anyway, don’t have any regret as, as far as I understand, you built their MVP and they’re now going to scale and rebuild their solution from scratch with a development team.

Also, they will be your sponsor for future MVP, for them or their network. That’s also important, a king of ROI !

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Agile mode, I have no idea what they need done for the day until it’s afternoon, then I start working on it right away. I do know that they’ve found product/market fit and are generating revenue, because back when I was building it in December, I was on a call with one of their employees and they got a slack notification that someone closed a deal worth the amount I charged from October to December.

@Boost It’s actually a good thing that they’ve raised money, having that on your portfolio will allow you to get more exposure and start playing with the big boys.

You don’t want to get burned because the client feels you’re on to their business, if I was the business owner and a developer would ask me for a portion of my business, I would start looking for another developer asap.

FYI, the investors will push to get the application built outside of Bubble as they want to have more control over the code =)

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It’s tough for you to make a strong argument to get equity at this stage. Not impossible, but difficult. You had an hourly rate agreement, and they are meeting their end of that agreement. I agree with the comments above that this is a great notch on your Bubble resume and, most importantly, a key learning for you moving forward.

Ultimately, you should be thinking about how you want to structure your deals moving forward. If you want a piece, this will need to be negotiated upfront. But then you must be ok taking less of an hourly rate.

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Hello @Boost.

It’s hard to get what you are trying to do. But honestly a Startup it’s not just the “tool”. Actually anyone can create an MVP more or less complex, but an MVP at all. And if that client raised an investment it’s because he did all the steps that requires to raise an investment which is not only to have the tool.

TBH with you, if I was the client at the same moment you ask me for a % of the business that I created (not developed) I would fire you immediately. It’s my business, and you were hired ONLY to do X (even if you did all the app). Who is the app owner? Who told you to create the app?

Be careful at how you tell him to give you a portion because it can end very wrong.

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You would not have known when you started working for them that they would raise investment. Most people who start off with “I have an idea we are going to raise investment later” never manage to do so. If you are thinking you should have taken equity back then, instead of $/h then don’t - you got paid for the work and you can pay for things with that. You can’t pay your rent with equity.

Nobody is going to give you any equity for past work done. I would not even waste your time asking - it will not help your credibility.

I see you have two options:

  1. You have a great product on your portfolio that you can tell people you built the MVP so they should hire you too.
  2. This startup somehow wants to stay in Bubble and they see you as a core part of that so they hire you and give you some equity.

Just don’t beat yourself up that you did something wrong. Be proud that you were part of the story.

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I was telling the product guy about Wappler, so hopefully they’re open to switching to that cause at least it’s still in the no-code / low-code domain. :smiley:

Yeah, it’s so easy to justify in my head “I just provided them 100-200x in value, so I should ask for 1-2%!” but you’re right at the end of the day, no-code is a commoditizable skillset, regardless that it’s high leverage. Matter of the fact is, anybody here could have built that and I just got lucky on who I was building it for. It really shows though that product-market fit, sales, team-building, etc are the truly valuable skillsets.

Yeah they did ask if I could stay with them long-term in the beginning, so I don’t know, we’ll see. But thanks guys for keeping me level-headed and seeing what others are thinking. It’s so easy to get attached to a project but at the same time, seeing it growing from 0 users to 100, and possibly blossoming to a unicorn would be a beautiful thing to watch.

Sounds like you have a good opportunity to network into the startup community and position yourself as a CTO or fractional CTO for a future startup, and in those cases you would have every right to get equity or options. Even though anyone could have helped your current client build the site, fact is you were the one who did it, and you built it well enough for them to become successful. That kind of proven experience will have a lot of value for a startup.

Or the other option is if your client really likes you and you like the company, you could express an interest in becoming part of it, and most small startups will give some equity incentives to the early employees.

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@Boost - It’s a very difficult conversation to go ask for equity when the work done. If they paid you for the work, then the deal is done. There are a few things you could do:

  1. Ask them about coming on full time. Try get some equity on top of salary.
  2. Use this as a learning experience. Look out for opportunities to work with someone in the future and forfit your fee in exchange for equity (although there are a lot of challenges with that as you won’t know the person and they could screw you).
  3. Build your own app, and be an entrepreneur yourself. You could develop something new, or create a better product than what you built for the unicorns and go head to head against them

I recommend option #3.

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Yeah, they’re moving off of Bubble in May when they raise their next round, so they’re not gonna need me anymore. I agree with #3

@Boost, do you mind sharing the domain for the site you built. It would be awesome to see a benchmark for what good looks like that will ultimately be scaled commercially.

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They will definitely need you, there is a transition process with the new developers. You’ll need to write up a technical documentation outlining every feature on the app, build API connections to export the data from within Bubble to the new app. This process on itself is time-consuming and you should get the chance to work on this, at least if you have communicated this with the client =)

I have never seen apps going off the platform without having any sort of transition process.

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Messaged you

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Equity won’t happen unless you have leverage. If it were me, I might walk away if they don’t agree to a 1% minutes minimum. That puts them in a difficult place since the timeframe is between them getting a new developer and you leaving.

Be nice, but be firm that many of the platform nuances are from you. Otherwise you bounce with your hourly money and build something new.

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I did have leverage before, but what I did instead was I raised my hourly rate :neutral_face: Don’t be like me, know your worth folks! Think like a business owner, not an employee!!

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another one moving off bubble as soon as they can eh.

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