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Home Q&A Forum What is the best way to receive equity compensation for work as a consultant?

Startup

Equity Agreement

Massachusetts

Asked on Oct 25, 2021

What is the best way to receive equity compensation for work as a consultant?

I work as a fractional CFO to startup companies providing monthly services for a fixed fee. I'm looking to put in place an agreement where I receive a fixed rate of cash compensation each month, along with a fixed dollar rate of equity compensation each month. Given that these are startups, the valuation is generally not known at the time of the agreement. What is the best way to structure this arangement?

1 Attorney answer

Answer

Startup

Massachusetts

Answered 954 days ago

Moss S.

ContractsCounsel verified

Business Lawyer
Licensed in Florida, Massachusetts, Rhode Island
Free Consultation

It is always difficult to set a fair compensation package when a valuation of a company for equity purposes is unknown. Normally when funding a startup company, investors are given a valuation for their investment should the company be successful. If this is not ascertainable, I would suggest setting forth certain milestones of the amount of time expended and relate that to a percentage of equity in the company.

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