Bartering one’s professional services for an equity position in a young, publicly-traded company can pay big dividends, or turn into a dud. But the chances for outstanding success are possible, which is not the case in the normal course of business (when receiving a check for your efforts).

This story illustrates the dilemma one faces when bartering for equity. The question always arises, “What should I do? Hold on or sell? For every one (small publicly-traded company) that makes it big there are scores of others that never make it.

One That Did Make It…And Another “If Only” Story

The Venture Law Group, which helps launch startup internet companies like Yahoo, eToys, and Netcentives, received up to 5% of a company’s equity in exchange for their professional services.

Chairman Craig Johnson said they owned 1% of Yahoo, but sold the shares for $2 each…shortly before Yahoo’s public offering. Now, Johnson laments, “If only we had held it!” Yahoo’s market value is now over $39 billion, so a 1% interest would be worth a cool $390 million! And if the Microsoft buyout occurs the value will be even more.

Bartering for equity is just one subject the BarterNews FastStart Program covers: BARTER

This entry was posted on Monday, February 25th, 2008 at 8:14 am and is filed under Best & Brightest Barter. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.