Ask HN: Is it common to build a product for equity?
On a one-off basis without a longer term co-founder position, I mean.
Would love to hear examples if so.
Would love to hear examples if so.
You are going to be an investor quite literally in the product so you need faith in the founder(s), the mission, the business plan (if there isn't one, you need to tell them they need one), and you need the deal structured like a cash investor would have.
If they balk at any of these asks or push back, you should walk in my opinion.
I've done this before but on a very informal basis. Would I ever do it again? Probably not. It's just too easy to get burnt or all your work to go to waste (which is what happened to the one time I did this).
Are you choosing not to be a co-founder or are they asking you not to be? Why? These aren't questions to answer here, but simply asking yourself.
It could work, but if you don't have the right legal support, it could be hell.
You need to be clear about your expectations and understand that you are probably taking more risk than the co-founders on their own project.
They can convince you with their idea, their projections and their connections to achieve their goals, but that is not enough and it does not guarantee anything. It only ensures a beneficial asymmetric risk for them.
You have to have a good contract and if you decided it wasn't for you I wouldn't blame you.