Equity without vesting and exit is friendship damage
Equity-for-dev sounds aligned until vague terms hurt both sides. Cover percent, delivery, vesting, IP, failure exit, and cash mix. We only consider such partnerships with clear product and compliance boundaries and a written Definition of Done. Below is a negotiation checklist—not legal advice; use counsel. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Price the work before the percent
Estimate as a cash project, then discuss percent and anti-dilution. Pure gut percents breed later resentment. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Vest against delivery milestones
Combine time and milestone vesting. Pause vesting on misses. Avoid full grant before the product ships. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
IP and open-source boundaries
Business code to the company; reusable components licensed back only if written. Attach OSS license lists. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Decision rights and governance
Name product owner, tech owner, escalation path. Equity is not day-to-day authority unless granted. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Exit, buyback, termination
Unvested treatment on termination, code handoff, reasonable non-compete. Special cases per local law. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Cash mix is healthier
Partial cash covers hard costs (people, infra, audit). All-equity often collapses under cash pressure. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Information rights and transparency
Periodic business/finance summaries and major financing notice. Studios need to know if equity sits in a stalled story. Fold this into KSX discover→design→build→launch checks on staging so verbal alignment does not drop the requirement. Fold this into KSX Studio discover→design→build→launch: named owner, Definition of Done, staging proof, and rollback so verbal alignment does not drift.
Checklist
- 1Cash-equivalent effort estimate archived
- 2Vesting + milestones in the agreement
- 3IP and license annex complete
- 4Termination and buyback clauses clear
- 5Counsel review before work starts
Key takeaways
- Equity partnerships are investments—not friendship discounts.
- Vesting against delivery protects both sides.
- Cash+equity mixes are usually more sustainable.
FAQ
- What percent is reasonable early?
- Depends on effort, stage, dilution; negotiate with cash-equivalent and round models—not verbal round numbers.
- Board seat for the studio?
- Observer/info rights are more realistic; director duties are heavy—be cautious.
- Work first, contract later?
- High risk. At least a term sheet and interim IP assignment.