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Comment by paulpauper | Hacker News Reader

I wonder if employees will start treating stat-ups like VCs do, by joining many firms for fractional equity of a single employee.

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The difference, of course, being that employees (even the fractional kind) will not get the preferential stock treatment that VCs have, and many will not have the legal resources or expertise to protect themselves throughout the ongoing life of the company.

So, partner up, hire lawyers, and cut MSAs that protect your collective IP and other interests. There are plenty of employee owned companies to pattern after (e.g. W. L. Gore & Associates).

Sadly Ronald Coase' theory of the firm gets us here. The idea is that for a given business process, say designing an engine cylinder, painting a widget, there is a complexity that the free market cannot profitably supply and it's simpler to hire someone and change their job description every day to cope.

The advent of software means more complexity can be codified so we will see smaller firms and more outsourcing (socially beneficial) but, if you need to hire someone, it basically means you cannot find a suitable replacement in the market.

This may of course be your fault - but still :-)

There's a recent EconTalk episode on how the decrease in transaction costs from technology & the internet reduces the need for Coasean-syle firms: http://www.econtalk.org/archives/2015/06/adam_davidson_o_1.h...

If joining a company was just as risky as giving it a couple million dollars and hoping it doesn't (but it probably will, by the way) run itself into the ground, I'm sure that's the way things would be. But as an employee in the tech industry with skills, the worst thing that could possibly happen to me is I'm out of work for a couple weeks. There's no risk at all.

Are you factoring in opportunity cost? If you're working 3-4 years for 30-50% less than you could earn at an established company, you're effectively risking a dollar value that would qualify as a non-trivial early stage investment.

Capital investment is primarily passive. Employees are valued by their activities. What you describe sounds more like consulting and anything other than cash payment is usually a bad idea for at least one party and probably both.

There's maybe a startup idea there: a service like Gigster [1] where the vetted developers also get equity, not just pay.

[1] https://www.trygigster.com

Assembly is along the same vein: http://venturebeat.com/2013/11/01/assembly-will-crowdsource-...

Looks like they have pivoted -- assembly.com has the heading "Simple Changelogs for happy teams", with no mention of crowdsourcing project ideas for equity.

Pretty much what we do at Prontotype http://prontotype.us/

Ignoring the issues of non-competes, ethics, and trade secrets, how do you expect one person to be an effective full time employee for 3, 4+ companies at the same time?

That's actually a very interesting idea.

The break down might look like this:

($100-$120/hr contracting + 0.025% equity)

- 20% time to company x

- 20% time to company n

- 20% time to company z

- 40% time to company y

All at the same time? The context switch you have to do will end up being a counterproductive factor. I'll guess the burnout rate would be high too (few weeks down the line and you'd focus on only one or two)

A few weeks down the line and you'd better know which ones are worth your time! And the cost of context switching may be worth it for diluting risk.

I think what actually happens now in SV is more realistic - employees switch jobs every 12-18 months.

You have to be a unicorn in your own right for me to give you equity at one day a week in my company. Don't let the white hot market fool you about your actual abilities, you need to focus to accomplish great things.

That said, startups are desperate to hire, so it's possible you could pull this off.

You can also achieve the same by contracting for one company, and then using spare cash to buy shares on the stock market.

Wouldn't it be easier to just pool the equity with a bunch of employees across the nation and distribute the risk and reward. Though I bet there is some sort of restriction on the stock options.

All equity awards come with a nontransfer clause in the agreement (exceptions are limited to family members, usually in extreme circumstances like death)

Does that apply after the options have been exercised? Can you have a contract saying that you'll share part of the payout from exercising the options?

Would startups agree to you working for them only one day a week?

Do you have the patience to wait out a 6 week period of negotiation that might result in another candidate taking the job full time? If so, then offer terms to 5 companies simultaneously and take the first two that execute agreements. If that's going well, offer a few hours a week of engineering analysis and code review in return for right of first refusal on your original terms to one of the remaining three.

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