I don't have much cash to work with and I am working on developing a mobile app. However, I want to find a good designer to work with. I don't want to give them equity but I do want to pay people for their work. Would you recommend promising (in writing) a profit percentage? If so, how much would this be?
In my humble opinion and experience, this is a bad idea. If you don't have cash and can't raise it either, then you should be willing to give equity. Otherwise, your proposal may end up self-selecting a poor quality developer. The reason being is you're asking the dev to take on too much risk in return for very little reward, and the offer/demand curve is against you (there's lots of other entrepreneurs willing to pay cash and/or give equity for a good developer). I run a small software development firm (see www.chimi.co), we build mobile apps (among many other things), and we'd not accept this. We have, however, in very few occasions (e.g.: known entrepreneur we've worked with in the past, and upon satisfactory due diligence from our side, etc) exchanged a discount on services in exchange for (vested) equity.
