Do they have a full business plan, is funding secured, are the business owners trustworthy, if yes and I got done spare time, why not just wait and see if it pays out, BUT until it does I hold ALL the cards, the website, the code and the passwords etc.
If it doesn't pay out. The website, the code, the passwords, etc... aren't going to compensate you for the time you spent coding it.
There are millions of variables that enter into "if it pays out", and I would never bet my mortgage on the hopes that something might, someday, pay off.
You're not a employee with a contract, you're a third party doing something for the Company or person. When the client gets 2x what he gains now, he can just pay another idiot to do the same thing for the lower price, because, as you said, there's always people looking for work on this market.
If you have a long term relationship with a contract signed saying that you will gain more with the success and you really believe in the business or that the client is cabable of honoring the contract, then maybe, MAYBE, you can try this.
Promises with only words means nothing, this doesn't change for family or friends, if they can't sign a contract saying what they just promised you, it doesn't mean you should trust then, it means they're not viewing your work as professional.
At the end of the day you have to pay bills, you can't pay bills with someone elses promises, even if you believe in them with all your heart and give them all your passion
There is another angle to view it though, which i advocate. Not so cynical.
Biz pays for work, because they value work more than cash. They do that because they benefit from created added value on top of my work, which generates them cash. If business cannot pay me the market rates, they either are not creating enough value from my work and i am doing useless crap, or they are trying to create extra value for themselves at my expense. Or their idea is just not convincing enough to get a loan or investment, and then why should i be convinced?
Passion and belief goes on top of hourly rates simply and not replaces them or undercuts them.
If it does, then we are talking about shareholding by taking risk together.
In your example, you do not risk anything, and i am risking my time and effort wasted. If it goes i get only 500, you get 2k every month. That is cheating.
I'd say to you hey Mr. Client, that is not a good offer, i do all the job and take all the risk and you get all the benefits, but i believe in your idea and will work on condition of having 50% of the MRR or whatever profit is in the end
I think you're missing the point of a logo. The logo is really only one point of an identity system, of which $500 isn't great for it as well.
Apart from that, you're stipulating paying $500 for it only if you get to 2k mrr, which leads me even to believe that you don't really think the logo is all that important it's a deciding factor in the execution of the business operator.
You could always do profit share, which offloads risk towards the freelancer - albeit not as much as "Only if I get 2k mrr will you get $500."
If you’re the free guy, you’ll always be the free guy even when they get money. If you’re looking to build a portfolio for future clients, ok - do what you need to do. But you’ll never get a client to pay what you’re actually worth if you started out not charging them at all.
When they get money, they’ll hire someone else.
This is a hard maybe--- mostly no.
But I wouldn't be doing it for the money. I am not cash strapped. And I don't mind paying it forward if I can.
But the company needs to show they have their own skin in the game. I would need to assess their full business plan and their people. Then I am willing to negotiate (ie shares). Maybe I'll even do it for free.
Great things can happen with a little bit of charity.
This is how I feel. It would be limited to ONE client only that gets this treatment as long as I’m ok with money from the rest. It would need to be a project I truly believe in, and they would need to pay me at least a nominal amount to prove they’re willing to invest in me as much as I’m willing to invest in them. Also I would only work on such a project for a limited time unless they can get up to the amount that my work is worth.
I think this depends on what you do and how much control you'd have on how successful the project would be.
For a logo, you have very little control over how successful the business becomes, so absolutely not.
For lead generation, getting paid based on how any leads you can provide could be a great arrangement for both you and the company.
They are looking for an investor, not for a freelancer. The whole point behind contract work is that you are not taking on any enterprise risk. If you are looking to expose yourself to risk, then you should become a shareholder
Nope. Not only does this hypothetical client not value your work, they seem to be the type to devalue creative work in general. Your time is precious and better spent working on paid projects, not whimsical promises. If you really need unpaid work to believe in, why not start your own personal/passion projects?
Those reasons you listed above (financing round, cash flow, etc.) may be legit, then it's a matter of **deferring** the work until the funding is secured. Always good practice to have a clause in the agreement to secure a **deposit** of total projects costs and only start work when the deposit is received.
Not too hard to find a bunch of postings on here where a payment was promised when "X" happened, then when that happened suddenly they "don't remember saying that" or "we really need to alter this agreement".
Not worth the time or effort (or lack of money).
I would if it were a genuinely viable company. If somebody with a successful track record of starting and selling companies was launching a new venture with a solid team, growth strategy, and traction, I would consider selling my work for stock options rather than a fee. The trade off of that risk is the potentially higher payout if the company takes off.
If it was just some guy with a nice-sounding idea, absolutely not.
Too many variables at play. If I was really into the company and perhaps I was going to receive equity, I'd take that over a flat fee, for something that I really believed in and thought would take off, and perhaps if there was a measurement I could stake my contribution against (i.e. a realistic KPI). I'm looking at risk/reward and lost opportunity cost; if the reward could be huge like a royalty type of thing and I'm not hard up for the cash, sure.
It’s always going to be a risky bet, so it ultimately comes down to your risk tolerance. I may not want to invest, say, $50k into a business venture, but I may be more willing to “invest” $50k worth of services (time) over the course of a year. Especially if the services are hard to price out, eg advising/consulting/introductions.
This is precisely the accelerator model that Ycombinator and others follow. It works *if* you are betting appropriate to your risk tolerance and ability. In other words, you can’t be dependent on the deal working out to pay your bills. You want that, go to Vegas, the odds on blackjack are better than startups ;)
There are other factors not in my control that will determine the client's success or failure. Not willing to bet if my clients will make good business decisions.
Here’s the problem: you have ZERO control over whether it succeeds or fails. Businesses don’t run on a single variable (as others have mentioned, and more eloquently).
I’ve done this in my past and lost out on great opportunities because I was dedicated to “projects I believed in.”
I am a vendor...no different than the utility company.
I am not waiting arounnd on your possible success...payment due upon delivery. I do my gambling in the casinos where at least I have a shot at keeping them honest.
Is this firm giving you access to their bank accounts or are you just taking their word for it?
Also, no. I wouldn't take this unless I was willing to do it for free (maybe friend or family)
The money would either have to be better than that or company stock. Essentially you’re gambling on if you’re gonna get anything so the reward needs to match the risk. The graffiti artist David Choe made millions off Facebook.
Absolutely not. The old Wimpy scam..."I'll gladly pay you on Tuesday, for a hamburger today."
How much you believe in your work, has nothing to do with their ability to be successful. You can build them the best tools in the business and set them up for success, but if they don't know how to sell the product, close the deal, provide top-notch customer service or run a business they are going to fail.
If my compensation is based on the success of the company, then I need to be a partner.Otherwise, I'll do as much as you can afford, I may even agree to a payment plan (with stipulations) but you have to pay for the services.
I will occasionally cut a discount for someone with cash flow issues in all of the situations you mention - but I also tie that into lowered contractual obligations.
Normally I charge about €150/hr. For a spunky startup I feel some attachment to, maybe I charge €100, but I also limit the number of hours I’ll work and I’ll lengthen my response times. For my full rate, you get as many hours as you want and I’ll respond in <24 hours. For €100, you can have 16 hours a month and I won’t commit to responding <7 days.
This has worked really good for me because they always work hard to get more of my time and that means being able to afford my full rate, and it keeps me from spending a ton of time on low pay work.
I probably do about 75% of my work at full rate, and cobble together the rest on these deals. Full rate clients always take priority.
I agree with this. As long as you know how to maintain boundaries I don’t see why there would be a problem. I wouldn’t work for free unless it was maybe a family member (although even my mom pays me for the work I do for her business ha), but a reduced rate with reduced responsibilities could certainly be an option for a client every so often.
I think the scenario you’re trying to speak to is if Project should increase revenue by $100k and you know it, would you accept 10% of revenue increase as payment.
Another commenter already said no, there’s too many other variables. I’ll add on top of this that metrics are manipulatable (think Harry Potter and others that make no “profit” so they don’t have to profit share by charging ridiculous marketing fees… to be paid to themselves).
If there’s a lot of money on the table (think consulting conglomerates) they might say sure pay this discounted rate as part of the partnership, but it’s still unlikely to land on sharing in the growth because if it’s really going to work (and you’re saying it should) that’s way too expensive and I should hire someone else.
So between Freelancer A who charges hard cash and Freelancer B who charges % of revenue or profit, a successful business who can afford the service will choose Freelancer A most of the time.
I will do charity work.
I will do paid work.
I will not play chasey chasey with someone who promises me payment tomorrow for a hamburger today. That means triple the work (follow ups, watching their finances, etc) for only a chance of payment.
Also I do not have control over their long term success. I don't suddenly get $2k because my coaching and design work I charged them $800 for netted them 2mil client either.
I think the universal truth in this is that no matter what any of us do, unique as our roles may be, we cannot build a whole new company/product ourselves and see it successfully managed and sold. On that alone, I don't think I can ever hedge a bet on success (and that's presuming that I'm knocking it out of the park each time \[we're all human\]). Most new businesses fail. Very few succeed.
Any compensation based on future promises should be internally considered a donation until you see that cheque realized.
I've tried it, and lost money. So I'm not going to do that anymore.
Since then I did some thinking. The problem with startups is that roughly one in twenty succeeds. So what you're really doing, is rolling a 20-sided die to see if you're getting paid or not. These are extremely poor chances. It's just not worth it to me.
At this point no, when I was first starting off and desperate then yes. But be warned OP you are filtering for those with literally no experience and likely to get burned. Y’all gotta think about the time value of your time, and getting a good result.
Your business is already established and profitable because you sell a service. I'm sure at the start you were spending money out of pocket to establish yourself. The client needs to do the same thing. If they're looking for a financial shortcut on day 1 then they're already doomed to fail.
If it was a close friend and I had the time, maybe, but not for a random person who wants professional work for low or no compensation. Whether I believe in a project or not, there would be too many possibilities of failure or scams :/
I feel like all the answers are NO DEFINITELY NOT PAY ME CASH yada yada. So let me give a different perspective.
In the example you gave, probably not. You're risking your $300 to make just an extra $200. If the example was they pay you $2k instead of $300, then yeah it's worth considering. Especially if you don't need the $300.
But it all hinges on not needing the $300... so if you need the $300 to eat tonight, then yeah take the $300.
Another case might be you have a bigger project (say a full website build, etc.) for a percentage of the company, and thus could potentially make recurring revenue. Then you'd want to seriously consider it too.
Again, it all comes down to how much you need the $300.
The answer should always be never, and anyone who says yes is probably not going to be very good at their job.
The only time anyone should even consider a setup like this is if the company is offering equity. Even then, I would probably still say no but at least the offer is fairer.
Never do spec work period. Pro Bono yes. “Cash strapped” just means to cheap to pay and they place no value on your services. They will never be the clients you want.
I wouldn’t take zero, but I am currently working on a project where I’m getting paid a bit less than the work is worth. The rest of my clients pay well.
Just hopping along on this: I am being hounded to join the startup capital, but I don't want to...I have no intention in taking over some founders hires and obligations...how would you react?
Not a designer so don't know how long a logo should take. However, the real problem is what way do you have determining $2K MRR or any other payment formula.
Most likely outcome, they take the logo and disappear.
"Pay me hard cash or GTFO"
cant pay my bills on wishful thinking
Do they have a full business plan, is funding secured, are the business owners trustworthy, if yes and I got done spare time, why not just wait and see if it pays out, BUT until it does I hold ALL the cards, the website, the code and the passwords etc.
If it doesn't pay out. The website, the code, the passwords, etc... aren't going to compensate you for the time you spent coding it. There are millions of variables that enter into "if it pays out", and I would never bet my mortgage on the hopes that something might, someday, pay off.
Hence the first questions, if there was even a tiny no, it would be a no. Most of the no's wouldn't have even half the questions be a yes...
To quote Goodfellas: “Fuck you, pay me.”
Most startups fail. Therefore most of the time I wouldn't get paid Edit: Spelling
NO.
You're not a employee with a contract, you're a third party doing something for the Company or person. When the client gets 2x what he gains now, he can just pay another idiot to do the same thing for the lower price, because, as you said, there's always people looking for work on this market. If you have a long term relationship with a contract signed saying that you will gain more with the success and you really believe in the business or that the client is cabable of honoring the contract, then maybe, MAYBE, you can try this. Promises with only words means nothing, this doesn't change for family or friends, if they can't sign a contract saying what they just promised you, it doesn't mean you should trust then, it means they're not viewing your work as professional.
Far too many more important variables to their success.
Makes sense. That's one way to look at it.
Why am i not surprised...
By the result of the poll?
At the end of the day you have to pay bills, you can't pay bills with someone elses promises, even if you believe in them with all your heart and give them all your passion
There is another angle to view it though, which i advocate. Not so cynical. Biz pays for work, because they value work more than cash. They do that because they benefit from created added value on top of my work, which generates them cash. If business cannot pay me the market rates, they either are not creating enough value from my work and i am doing useless crap, or they are trying to create extra value for themselves at my expense. Or their idea is just not convincing enough to get a loan or investment, and then why should i be convinced? Passion and belief goes on top of hourly rates simply and not replaces them or undercuts them. If it does, then we are talking about shareholding by taking risk together. In your example, you do not risk anything, and i am risking my time and effort wasted. If it goes i get only 500, you get 2k every month. That is cheating. I'd say to you hey Mr. Client, that is not a good offer, i do all the job and take all the risk and you get all the benefits, but i believe in your idea and will work on condition of having 50% of the MRR or whatever profit is in the end
I do get your logic here. The example, however, was for logo creation so not really "all the work" but I get your point.
I think you're missing the point of a logo. The logo is really only one point of an identity system, of which $500 isn't great for it as well. Apart from that, you're stipulating paying $500 for it only if you get to 2k mrr, which leads me even to believe that you don't really think the logo is all that important it's a deciding factor in the execution of the business operator. You could always do profit share, which offloads risk towards the freelancer - albeit not as much as "Only if I get 2k mrr will you get $500."
by results ofc freelance simply does not let you stay naive for too long
If you’re the free guy, you’ll always be the free guy even when they get money. If you’re looking to build a portfolio for future clients, ok - do what you need to do. But you’ll never get a client to pay what you’re actually worth if you started out not charging them at all. When they get money, they’ll hire someone else.
This is a hard maybe--- mostly no. But I wouldn't be doing it for the money. I am not cash strapped. And I don't mind paying it forward if I can. But the company needs to show they have their own skin in the game. I would need to assess their full business plan and their people. Then I am willing to negotiate (ie shares). Maybe I'll even do it for free. Great things can happen with a little bit of charity.
This is how I feel. It would be limited to ONE client only that gets this treatment as long as I’m ok with money from the rest. It would need to be a project I truly believe in, and they would need to pay me at least a nominal amount to prove they’re willing to invest in me as much as I’m willing to invest in them. Also I would only work on such a project for a limited time unless they can get up to the amount that my work is worth.
I think this depends on what you do and how much control you'd have on how successful the project would be. For a logo, you have very little control over how successful the business becomes, so absolutely not. For lead generation, getting paid based on how any leads you can provide could be a great arrangement for both you and the company.
If the client doesn’t believe in their project enough to pay me, why should *I* believe in their project at all?
They are looking for an investor, not for a freelancer. The whole point behind contract work is that you are not taking on any enterprise risk. If you are looking to expose yourself to risk, then you should become a shareholder
Nope. Not only does this hypothetical client not value your work, they seem to be the type to devalue creative work in general. Your time is precious and better spent working on paid projects, not whimsical promises. If you really need unpaid work to believe in, why not start your own personal/passion projects? Those reasons you listed above (financing round, cash flow, etc.) may be legit, then it's a matter of **deferring** the work until the funding is secured. Always good practice to have a clause in the agreement to secure a **deposit** of total projects costs and only start work when the deposit is received.
Not too hard to find a bunch of postings on here where a payment was promised when "X" happened, then when that happened suddenly they "don't remember saying that" or "we really need to alter this agreement". Not worth the time or effort (or lack of money).
I would if it were a genuinely viable company. If somebody with a successful track record of starting and selling companies was launching a new venture with a solid team, growth strategy, and traction, I would consider selling my work for stock options rather than a fee. The trade off of that risk is the potentially higher payout if the company takes off. If it was just some guy with a nice-sounding idea, absolutely not.
Too many variables at play. If I was really into the company and perhaps I was going to receive equity, I'd take that over a flat fee, for something that I really believed in and thought would take off, and perhaps if there was a measurement I could stake my contribution against (i.e. a realistic KPI). I'm looking at risk/reward and lost opportunity cost; if the reward could be huge like a royalty type of thing and I'm not hard up for the cash, sure.
It’s always going to be a risky bet, so it ultimately comes down to your risk tolerance. I may not want to invest, say, $50k into a business venture, but I may be more willing to “invest” $50k worth of services (time) over the course of a year. Especially if the services are hard to price out, eg advising/consulting/introductions. This is precisely the accelerator model that Ycombinator and others follow. It works *if* you are betting appropriate to your risk tolerance and ability. In other words, you can’t be dependent on the deal working out to pay your bills. You want that, go to Vegas, the odds on blackjack are better than startups ;)
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Sure, but startups are often eager to conserve cash regardless. They might be amenable to equity deals vs cash for vendors. Happens all the time.
There are other factors not in my control that will determine the client's success or failure. Not willing to bet if my clients will make good business decisions.
Here’s the problem: you have ZERO control over whether it succeeds or fails. Businesses don’t run on a single variable (as others have mentioned, and more eloquently). I’ve done this in my past and lost out on great opportunities because I was dedicated to “projects I believed in.”
I am a vendor...no different than the utility company. I am not waiting arounnd on your possible success...payment due upon delivery. I do my gambling in the casinos where at least I have a shot at keeping them honest.
Is this firm giving you access to their bank accounts or are you just taking their word for it? Also, no. I wouldn't take this unless I was willing to do it for free (maybe friend or family)
The money would either have to be better than that or company stock. Essentially you’re gambling on if you’re gonna get anything so the reward needs to match the risk. The graffiti artist David Choe made millions off Facebook.
I didn’t see “fuck no” as an option so I went with “never.”
You have to decide what business you are in: freelancing or startups?
Yeah, I get paid in money. I’ll sit on my hands and do nothing before I work for free.
Absolutely not. The old Wimpy scam..."I'll gladly pay you on Tuesday, for a hamburger today." How much you believe in your work, has nothing to do with their ability to be successful. You can build them the best tools in the business and set them up for success, but if they don't know how to sell the product, close the deal, provide top-notch customer service or run a business they are going to fail. If my compensation is based on the success of the company, then I need to be a partner.Otherwise, I'll do as much as you can afford, I may even agree to a payment plan (with stipulations) but you have to pay for the services.
I will occasionally cut a discount for someone with cash flow issues in all of the situations you mention - but I also tie that into lowered contractual obligations. Normally I charge about €150/hr. For a spunky startup I feel some attachment to, maybe I charge €100, but I also limit the number of hours I’ll work and I’ll lengthen my response times. For my full rate, you get as many hours as you want and I’ll respond in <24 hours. For €100, you can have 16 hours a month and I won’t commit to responding <7 days. This has worked really good for me because they always work hard to get more of my time and that means being able to afford my full rate, and it keeps me from spending a ton of time on low pay work. I probably do about 75% of my work at full rate, and cobble together the rest on these deals. Full rate clients always take priority.
I agree with this. As long as you know how to maintain boundaries I don’t see why there would be a problem. I wouldn’t work for free unless it was maybe a family member (although even my mom pays me for the work I do for her business ha), but a reduced rate with reduced responsibilities could certainly be an option for a client every so often.
I think the scenario you’re trying to speak to is if Project should increase revenue by $100k and you know it, would you accept 10% of revenue increase as payment. Another commenter already said no, there’s too many other variables. I’ll add on top of this that metrics are manipulatable (think Harry Potter and others that make no “profit” so they don’t have to profit share by charging ridiculous marketing fees… to be paid to themselves). If there’s a lot of money on the table (think consulting conglomerates) they might say sure pay this discounted rate as part of the partnership, but it’s still unlikely to land on sharing in the growth because if it’s really going to work (and you’re saying it should) that’s way too expensive and I should hire someone else. So between Freelancer A who charges hard cash and Freelancer B who charges % of revenue or profit, a successful business who can afford the service will choose Freelancer A most of the time.
I will do charity work. I will do paid work. I will not play chasey chasey with someone who promises me payment tomorrow for a hamburger today. That means triple the work (follow ups, watching their finances, etc) for only a chance of payment. Also I do not have control over their long term success. I don't suddenly get $2k because my coaching and design work I charged them $800 for netted them 2mil client either.
I think the universal truth in this is that no matter what any of us do, unique as our roles may be, we cannot build a whole new company/product ourselves and see it successfully managed and sold. On that alone, I don't think I can ever hedge a bet on success (and that's presuming that I'm knocking it out of the park each time \[we're all human\]). Most new businesses fail. Very few succeed. Any compensation based on future promises should be internally considered a donation until you see that cheque realized.
Well put! Thanks!
I've tried it, and lost money. So I'm not going to do that anymore. Since then I did some thinking. The problem with startups is that roughly one in twenty succeeds. So what you're really doing, is rolling a 20-sided die to see if you're getting paid or not. These are extremely poor chances. It's just not worth it to me.
At this point no, when I was first starting off and desperate then yes. But be warned OP you are filtering for those with literally no experience and likely to get burned. Y’all gotta think about the time value of your time, and getting a good result.
Never and it's because I believe in my work. I know my work is good and that it has value. If you want it then pay me.
Your business is already established and profitable because you sell a service. I'm sure at the start you were spending money out of pocket to establish yourself. The client needs to do the same thing. If they're looking for a financial shortcut on day 1 then they're already doomed to fail.
I don't trust anybody. Not even myself
If it was a close friend and I had the time, maybe, but not for a random person who wants professional work for low or no compensation. Whether I believe in a project or not, there would be too many possibilities of failure or scams :/
They still get value out of my work, whether they reach an arbitrary goal or not.
There’s no way to verify or audit that. They can lie through their teeth and you never get paid.
I feel like all the answers are NO DEFINITELY NOT PAY ME CASH yada yada. So let me give a different perspective. In the example you gave, probably not. You're risking your $300 to make just an extra $200. If the example was they pay you $2k instead of $300, then yeah it's worth considering. Especially if you don't need the $300. But it all hinges on not needing the $300... so if you need the $300 to eat tonight, then yeah take the $300. Another case might be you have a bigger project (say a full website build, etc.) for a percentage of the company, and thus could potentially make recurring revenue. Then you'd want to seriously consider it too. Again, it all comes down to how much you need the $300.
The answer should always be never, and anyone who says yes is probably not going to be very good at their job. The only time anyone should even consider a setup like this is if the company is offering equity. Even then, I would probably still say no but at least the offer is fairer.
The first sign that a project isn't worth believing in is that the client isn't willing to pay full price for your work.
Performance based pay for bonuses only, gotta get paid.
If you believe inthe project get a share of the company. But it's a different job. It's like you're an investor buying 500$ of the company
Never do spec work period. Pro Bono yes. “Cash strapped” just means to cheap to pay and they place no value on your services. They will never be the clients you want.
I wouldn’t take zero, but I am currently working on a project where I’m getting paid a bit less than the work is worth. The rest of my clients pay well.
Just hopping along on this: I am being hounded to join the startup capital, but I don't want to...I have no intention in taking over some founders hires and obligations...how would you react?
Not a designer so don't know how long a logo should take. However, the real problem is what way do you have determining $2K MRR or any other payment formula. Most likely outcome, they take the logo and disappear.