Getting Paid in Stock as a Consultant

Getting Paid in Stock, Options or Promissory Notes: Negotiating Non-Cash Payment for Consulting Services

On May 1, 2010, an article I wrote for consultants on this subject was published in The Reflector, the monthly newspaper of IEEE (Institute of Electrical and Electronic Engineers). The article raises a numbers of questions, and, as published, gave notice of a presentation I gave on this subject on May 26, 2009 for the IEEE Consultants’ Network in Waltham, MA. In that presentation, issues discussed included – When does taking equity instead of cash make sense? and three circumstances were cited:

  • When the consultant believes he or she could contribute great value to the company and thus see real appreciation in equity;
  • When the consultant has the time (lack of full paying jobs) and knowledge, training and experience to be gained from the work could prove useful to qualify for and attract other desirable paying work
  • When there is other “currency” for payment including the consultant gaining contacts, attending a trade show, gaining exposure on the web or in company promotions, or gaining access to useful technology

My presentation also included benefits of a promissory note in collection and terms to seek in a promissory note.

For May 1 The Reflector article, see

LINK: http://www.engelschultz.com/index.php/getting-paid-in-stock-options-or-promissory-notes-negotiating-terms-of-non-cash-payment-for-consulting/

For an earlier article in Business Week Online under the title “Making Stock-for-Pay Plans work well” where I was interviewed on the subject, see

LINK: http://www.bloomberg.com/bw/stories/2006-09-05/making-stock-for-pay-plans-work-wellbusinessweek-business-news-stock-market-and-financial-advice

To see slides from my presentation, LINK: http://www.engelschultz.com/index.php/getting-paid-in-stock-options-or-promissory-notes-negotiating-terms/

If you are considering taking or giving stock or a promissory note in payment for services and have questions or need assistance, please let me know.

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