Should You Take that Equity Offer?

What do you do when prospects approach you for work, but they can’t (or won’t) accept your usual compensation terms?

Instead, they want to pay you a percentage of their profits, or give you an equity stake in their business, or promise you lots of work in the future 

Some of these offers may sound tempting and lucrative.  

But unfortunately, they rarely work out that way. 

Whenever I’ve accepted this kind of arrangement in the past, I’ve always been disappointed. And the same is true of the writers I know who’ve attempted it.  

At best, I estimate that these arrangements work out well for the writer only one or two percent of the time.  

Still, that doesn’t mean you can’t come to some kind of agreement under the right conditions 

Established Companies 

In some cases, the company making you this offer is well establishedThey probably have the budget to pay in you cash, but they insist on paying you a combination of cash and equity.  

Sometimes companies take this stance as a way to motivate you to produce better results. And sometimes it’s just a way to negotiate down your fee 

This kind of arrangement can be acceptable if the cash portion of the compensation is enough to cover your costs and turn a profit. If the equity portion pays off, it’s gravy.  

So before you accept, make sure you’re satisfied with just the cash portion. Because that’s likely all you’ll get.   

Well-Funded (But Cautious) Startups 

Sometimes, the company is a well-funded startup. It seems like they have the budget to pay you in cash, but they’re being cautious 

Often, they’re not sure what marketing content they needand they don’t want to invest a lot of money into it. And so they come up with a cashplusequity offer.  

In this kind of scenario, you can suggest a consulting engagement where you help them develop their marketing strategy or project plan only for a cash fee. You help them define what they need and how to get there.  

In other words, you limit the engagement to planning and/or strategy and don’t get into the writing part at all.   

However, you should only take this approach if you think the company will eventually turn to you to implement the strategy (i.e. write the content).  

Similarly, if the company already has a marketing strategy in place — and only needs help creating the content — you can offer to create just one or two of their highest priority pieces and charge enough (in cash, not equity) to make it work for you.  

When that’s done, the company can reassess its budget and come back to you for the next phase of content.  

Unfunded Startups 

Sometimes, you may be approached by an unfunded startup. They desperately need your help, but they can’t afford your fees. So they offer equity to make up the difference.  

It can be painful to say no in these cases, but it’s necessary.  

Remind yourself that it’s not your job to close every opportunity. It’s your job to close what’s closeable today — but only when it supports the long-term success of your business.  

Equity Arrangements Rarely Pay Off for the Writer 

Unfortunately, compensation in the form of equity rarely pays off for the writer.  

But sometimes, you can negotiate a different arrangement that works for you both.  

Still, consider whether you see a long-term future with the company. If not, you might be better off putting your time into landing a different client altogether. 

Preferably, a client that can pay your fees in full with cash. 



By the way… whenever you’re ready, here are 4 ways I can help you grow your freelance business:

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