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How to compensate a programmer

sw4467sw4467 subscriber Posts: 1
edited November 2010 in Business Planning

We are two business guys starting an online marketplace
where we take a commission from buyers and sellers. We have been working with a programmer who we
want to move forward with. We like
working with him and he has a lot of great input so far. He has come recommended and has pointed us to
resources which have greatly helped our development process without billing us
for any hours.
As we move forward, we have to decide how to compensate
him. Do we contract him for solely an
hourly rate? Do we give him a combination
of equity and revenue streams?
This is a fairly complex multipage marketplace with many
integration and user interface functions. We are starting with $10,000. The
programmer has decided that he likes our idea and is willing to cut his hourly
rate by 50% ($60 to $30 an hour) and take some percentage of future revenue
and/or equity in the company (non voting shares).
What would you recommend in this situation? Possible problems? Possible Benefits?
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