Service for Equity is a concept where external parties contribute services of any kind in return for company shares of the client. This concept enables resource investing, as opposed to capital investing. It is also closely related to Sweat Equity, which usually refers to team members who provide uncompensated labour and receive company shares for that. See even more terms in the glossary.
What does KAPSLY do?
Our mission is to enable all kinds of startups to grow their business with professional support. “New Work” models require an adaptation of the contractual agreements between two parties and drive demand for success-based compensation. KAPSLY provides a trustworthy community to push entrepreneurship and facilitates formal collaborations with fair and flexible payment terms.
What kind of services can I find on KAPSLY?
The KAPSLY marketplace provides all kinds of services. See the KAPSLY Matrix to understand how it is structured. Most service offerings are usually in IT and Marketing.
I’m an entrepreneur, what’s the benefit of service-for-equity?
Service-for-equity allows you to focus on your business operations and creating value. You can work with professionals while optimizing your liquidity. With service-for-equity you can incentivize people/companies who have a direct impact on your business success.
I’m a service provider, what’s the benefit of service-for-equity?
You can benefit from the real value creation that your services bring to your clients. Potentially higher returns also carry a higher risk of course. Our virtual company participation agreements are easy to set up and provide more flexibility.
What is the benefit of making a contract for service-for-equity collaboration?
Short answer: it adds security for both parties. First of all, our Agile Service Agreements give you time to get to know the business partner through a transparent collaboration, without committing to equity right away while having defined rules. You also don’t want to get married on the first date. Furthermore, both parties are really “invested” in the project and have aligned goals. And you do not need to pay expensive lawyers to figure out how to set up such contracts.
I’m concerned about running into problems later if I give up equity from my startup. Is funding my only option?
As a startup you should always be careful to give away equity too early. You also want to keep a clean cap table. At KAPSLY we have considered both. With the Agile Service Agreements you get the time to get to know your business partner before committing to a company participation. Furthermore, with our Virtual Share Agreements you do not give away real equity, but virtual company shares or Phantom Stock.
I’m confused, how can I learn more about this?
We are always available to help you find a solution that works for you! You can send us a message or book a call with us here.