Imho, the correct way to compensate not-really-founders is with a convertible note for the market value of their services times an appropriate risk multiple, or, if you can afford it, cash. (I have actually done this.)
Imho, the correct way to compensate not-really-founders is with a convertible note for the market value of their services times an appropriate risk multiple, or, if you can afford it, cash. (I have actually done this.)
If I was asking someone to do logo and design work for free (and just that) I'd offer something like 10% of net income with a end of life maximum at $35,000. That would allow them to potentially receive much more cash than the time they invested. It also establishes an upper bound to prevent someone for getting 1% of a billion dollar company because they wrote some html a few decades ago.
It's a risk-reward on both sides. Companies die off all the time. The vast majority of people that do work 'for a percentage' are going to get nothing.
With all that said, cash is always easier