Question
We are a startup that is in the process of manufacturing and distributing Nutricosmetics to the US market. Based on our pilot project, we understand that marketing, especially digital marketing, is key to growth in this highly competitive category. To conserve cash, we are thinking about hiring a marketing agency with experience in the beauty or skincare and offer 75% in equity and rest in cash based on results.
Are we being realistic? Are there marketing agencies who will accept equity as payment? From the startup perspective, is this a good idea in the long run?
Answer
The attraction is clear, the ability to get top fight services with no cash. Years ago we did exactly that with a manufacturing company we were starting. The challenge becomes as your company grows your need for service providers change, yet it is very difficult to tell a stock holder why you no longer intend to use their services. It also can get complicated around governance issues,
