2 builders who never spoke to each other

Trade part of the fee for a share of the upside

When a prospect cannot reach your number, cutting it teaches them what you are worth. Swapping a slice of the fee for equity keeps the headline rate intact and turns an affordability problem into an investment decision, priced as a fixed percentage per week of work or a valuation multiple both sides agree. Reserve it for clients you actually believe in, since the discount is only recovered if they succeed.

The method

1. 01

   Price a build service as a standing weekly rate that can be halved in exchange for a fixed slice of equity each week.

2. 02

   When a prospect cannot afford the price, trade a fee discount for future upside instead of simply lowering the price.

3. 03

   Take part of the fee as ownership in clients you believe in, trading billable hours for equity.

What it returned

• $2,500

  A studio Haines describes charges $2,500 weekly, or $1,250 weekly plus one percent equity per week, so eight to twelve weeks of work costs $10k to $15k and eight to twelve percent of the company.

• $350k

  For a startup at roughly $350k ARR he offered $4.5k a month in cash plus $4.5k a month in equity at an agreed 4x ARR valuation, or $3k a month plus 15 percent of gross revenue starting a year in, or $4k a month plus a quarter of profits capped at three times the discount given.

• Gravitywell puts sweat equity into clients it admires, and Global Triangles took equity in Aguagente this way.

Sources

• Creative deals | Corey HainesCorey Haines · corey.co · 2024-07-05
• Software Development Services: Attracting New Clients, AI Apps, No-Code Tools - Trends.vcDru Riley · trends.vc · 🔮 Predictions · 2023-09-27