Sweat Equity
Definizione
Sweat equity is ownership earned through work rather than cash: founders, early employees, and sometimes advisors or contractors compensated in shares for below-market pay.
Come si presenta nel fundraising
Sweat equity is why vesting exists: contribution-based ownership must be earned over time, not granted permanently on day one.
Domande frequenti
How is sweat equity valued?
By negotiation, usually referencing forgone market salary and risk; formalize it in shares with vesting rather than vague promises.
Can contractors be paid in equity?
Yes, with proper agreements and IP assignment; loose equity-for-work arrangements are a classic diligence problem later.
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