Work for Equity Checklist

How to make work for Equity work for you?

The start-up companies need more than investment capital in order to succeed in this disruptive environment. Investors can succeed when they involve themselves in the development of the company without restricting themselves to funding alone. One way to be more effective is to work for equity.Work for equity is better in the long term than accepting cash compensation. It is worth waiting since equity can be substantial as the company grows. The options that you receive as equity can be cashed in any time. However, it is advisable to assess each opportunity and see when you can exercise the option.

If you exercise too early, you may lose out on the growth and if you wait too long, you may be at risk when the company doesn’t perform well.When you have decided to work for the equity you should make sure that you go through the below work for equity checklist to ensure you don’t miss the benefits of working for equity.

1) At first, you ensure your organisation or start-up supports work for equity?

2) Make sure the organisation has transparent performance review process and equality in training, promotions and rewards.

3) You should check whether companies accounts are transparent and no manipulation in the accounts is taking place.

4) Check whether proper Audit process by reliable auditors is carried out.

5) Whether work for equity is incorporated in the business objectives and goals.

When you follow the above checklist and be aware of start-ups or organisations policies before taking up work for equity, it would be a rewarding experience.

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Work for Equity Checklist

Determine work needed – Complete “Scope of Work” for all applicable
Scope of Work – Carpentry/General    Form REN-5300
Scope of Work – Roofing    Form REN-5301
Scope of Work – Electrical    Form REN-5302
Scope of Work – HVAC    Form REN-5303
Scope of Work – Plumbing    Form REN-5304
Scope of Work – Painting    Form REN-5305
Place a value on the repairs needed
“Rehab Cost Estimates” Guideline    Form REN-5103
or get your own Contractor’s Estimate
Run an ad
(or any others you think of)
Complete “Standard Rental Agreement”    Form WFE-9205-S
with Lead Based Paint, Asbestos, Mold and Radon Disclosure
Disclose in Special Stipulations that “Tenant” has offered and management has accepted that Tenant is skilled to repair the property and has entered into a separate contract for Tenant to act as Independent Contractor to complete the needed repairs.
Complete “Standard Option Agreement”    Form WFE-9208-SF
Show Option Fee as having been paid
Disclose in Special Stipulations that “Optionee” has offered and management has accepted that Optionee is skilled to repair the property and has entered into a separate contract for Optionee to act as Independent Contractor to complete the needed repairs.
Or complete “Standard Agreement for Deed” instead (not included)    Form AFD-7962-S
Show Down Payment as having been paid
Complete “Move-In/Move-Out Inspection Report”    Form WFE-9206-S
Disclose condition and in special stipulations ad “Tenant has offered and management has accepted that Tenant is skilled to repair the property and has entered into a separate contract for Tenant to act as Independent Contractor to complete the needed repairs.”
Note: When contractor completes work do another inspection report showing all OK, or as applicable.
Complete “Promissory Note”     Form WFE-9214
For the amount you have credited for Option Fee or Down Payment – YOU keep original
Complete a “Independent Contractors Agreement”    Form WFE-5500
Obligates them to complete the work as agreed at a specific price
Complete “Promissory Note Credit Schedule”    Form WFE-5501
How much and how payment will be applied as credit (or payment) on the Promissory Note
Once work is complete, you will mark the Promissory Note as “Satisfied” and this will serve as their down payment (Option Consideration).