Ask HN: Give equity shares to users. Good or bad idea? | Hacker News Reader

Ask HN: Give equity shares to users. Good or bad idea?

I was thinking about how to verify my ideas, market fit, etc. and acquire early users for feedback. Here is a crazy idea: 1. Give users who respond my surveys and become early users and provide feedbacks certain amount of shares. The logic you are investing your time with quality feedback to help me make quality product. 2. No vote right attached to those shares. 3. Only convertable when first version of product is launched or valuation reaches some bar.

Any opinions on my idea? Thanks!

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The way to validate your product is to talk to people who actually want the product. If you buy feedback (with money, shares, etc) then you'll be getting feedback from people who want the reward, but not necessarily the product.

Not to mention the fact that if your startup is a success the shares you give away are going to be diluted to hell as soon as you get any investment, so you'll only be getting feedback from people who don't understand that their reward is actually worthless, which would make me question whether or not their feedback is actually going to be useful. I might even ask if you know that and you're try to scam people in to giving you feedback for free while making them think there's something in it for them.

tl;dr It's a bad idea.

Not a new idea, many had it before. Nonetheless, it is intellectually interesting, but not practically.

1. Those early users would come for "free" money but how do you shares those shares? Equally by user? by feedback? ponderation by value of the feedback? How do you value it?

2. Those early users will sell those shares to who? Your company : Lowering the capital?

3. Don't you think that real early users would prefer to use your product for life instead of having some shares not really easy to fairly create nor to sell?

Hello Henry, Kenneth Stein here in Santa Barbara. While I'm inclined to post a substantive response to your query, I'd rather discuss with you offline. Feel free to view my LinkedIn profile: https://www.linkedin.com/in/kennethsteinesq

My email is:kenprivate@gmail.com

Look forward to hearing from you.

There are significant issues with having more than 500 people in your cap table. http://dealbook.nytimes.com/2011/01/03/facebook-and-the-500-...

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