A quick checklist and survival guide for anyone contributing time and skills in exchange for equity in a startup or project.
- Only certain legal business types can offer real equity.
- Make sure the entity is (or will be) able to legally grant you ownership.
- If it’s not yet registered, push for formal setup before promises of equity.
- Common setup: 4 years with a 1-year cliff
Use milestone-based vesting, tied to actual project delivery:
| Milestone | Description | Timeline | Equity Vested |
|---|---|---|---|
| M1 | Basic system architecture delivered | Week 1 | 10% |
| M2 | Core feature set developed | Week 2 | 15% |
| M3 | First version deployed for internal use | Week 3–4 | 25% |
| M4 | Iterations based on feedback | Week 5 | 25% |
| M5 | Handoff & documentation | Week 6 | 25% |
✅ Vesting happens as each milestone is confirmed completed, not just over time.
- Clarify what you’re actually doing (e.g. “backend developer”, “product design”, etc.)
- List your deliverables in writing
- Be specific: What tech stack? What parts of the product? What defines “done”?
- Ask for a Shareholders’ Agreement, Letter of Intent (LoI), or Sweat Equity Agreement.
- Key things it should include:
- Your % ownership
- Vesting terms
- Buyback or exit clauses
- What happens if either party leaves
- If you leave or are let go, vested shares should remain yours.
- Only unvested equity should be subject to clawback or repurchase.
Looking for local laws, entity types, or how to check if a company is registered in your country?
Check the guides below:
- 🇸🇪 Sweden
Want to contribute a guide for your country? Open a PR!
Use your local business registry or public company database to confirm:
- Legal registration
- Entity type
- Ownership structure
- Key people involved
Documentation ≠ distrust.
It’s how you protect relationships and avoid misunderstandings down the line.
This guide is for builders, dreamers, and grinders working on early-stage ideas.
Protect your time, your energy, and your slice. 🧃