It’s always interesting to read about new models for launching and funding web startups. A few years ago Y Combinator shook things up with their then-novel approach to startup funding of investing small amounts of cash in tiny, agile, young teams. Since, the YC approach has been copied by at least 7 or 8 other seed funds. Australia-based WebEquity is aiming to have the same sort of impact on the way web startups are built.
WebEquity it a marketplace of ideas where developers, designers, and others can offer their services on a sweat equity or revenue sharing basis. “Rather than traditional cash payment, the WebEquity community members will be rewarded based on revenue and/or equity share of the businesses they create,” says the site’s About page.
Essentially, WebEquity is a classifieds site where anyone with an idea (called the project’s “originator” on the site) can post a project scoping document and put out a call for help. In return, originators can offers equity or revenue sharing (or both) to the people who help them realize their idea. The site hopes to bring together not just developers and designers, but also lawyers, marketing and sales people, PR pros, and business mentors willing to offer their services for sweat equity.
The site was founded by Syndney, Australia native Paul Middleton who is, of course, using WebEquity to get WebEquity built. “The site was initially inspired by my need to get my own ideas realised – that’s where I’m hoping my personal revenue stream will come from,” he told TechNation Australia.
One potential stumbling point for WebEquity, which TechNation writer Kim Heras picks up on, is the apparent lack of support in working out team agreements. For now, Middleton intends to leave the specifics of equity distribution deals and IP rights to the collaborators on each project to figure out themselves. Heras doesn’t think that’s a good idea, and CrowdSpring co-founder Ross Kimbarovsky agrees. “The model looks interesting and the challenge quite great – and I agree with [Heras] 100% that it’s important from the start to develop a standard agreement for teaming and for dealing with IP issues,” said Kimbarovsky.
For his part, Middleton chimed in with his two cents in the comments on the TechNation post. “If potential community members are put off because I don’t offer more support (e.g. a standard agreement), then it’s obviously in my interest to provide this for my own benefit,” he wrote. “But this also represents an opportunity for someone within the community to offer their services by identifying this need, and who knows what might come of that for them? If was an IP lawyer, for example, I’d be falling over myself to register on the site and start getting involved in any project I saw posted.”
WebEquity is an interesting approach to startup funding and team creation and we wish them luck. We’ll be keeping an eye on the site to see what, if anything, originates from it. For now, WebEquity is mostly focused on Australia but Middleton hinted to TechNation that expansion is in the cards (and there is really nothing stopping anyone from outside Australia from signing up right now).
Frequently Asked Questions (FAQs) about WebEquity
What is WebEquity and how does it work?
WebEquity is an online marketplace that connects entrepreneurs and investors. It operates on the principle of sweat equity, where entrepreneurs offer a percentage of their business in exchange for the skills, expertise, and time of investors. This platform allows entrepreneurs to find the right investors who can contribute to their business growth, while investors get an opportunity to invest in promising startups and potentially earn a significant return on their investment.
How does WebEquity differ from other equity marketplaces?
Unlike traditional equity marketplaces, WebEquity focuses on sweat equity. This means that instead of investing money, investors contribute their skills, expertise, and time to help grow the business. This model allows startups with limited financial resources to attract top talent and expertise, which can be crucial for their success.
How can I join WebEquity as an entrepreneur or investor?
Joining WebEquity is a straightforward process. You need to visit their website and sign up as either an entrepreneur or an investor. Once you’ve created your profile, you can start exploring the available opportunities.
What kind of businesses can I find on WebEquity?
WebEquity hosts a wide range of businesses from various sectors. Whether you’re interested in tech startups, retail businesses, or service-based companies, you’re likely to find a business that aligns with your interests and expertise.
How does WebEquity ensure the quality of its users?
WebEquity has a rigorous vetting process to ensure that only serious and committed entrepreneurs and investors join the platform. This helps maintain the quality of the marketplace and ensures that both parties can trust each other.
What are the benefits of using WebEquity for entrepreneurs?
For entrepreneurs, WebEquity offers a unique opportunity to attract top talent and expertise without having to pay upfront. This can be particularly beneficial for startups with limited financial resources.
What are the benefits of using WebEquity for investors?
For investors, WebEquity offers a chance to invest their skills and expertise in promising startups. Instead of investing money, they invest their time and skills, which can be a rewarding experience both professionally and financially.
How does WebEquity handle disputes between entrepreneurs and investors?
WebEquity has a dispute resolution process in place to handle any disagreements between entrepreneurs and investors. This ensures that both parties are treated fairly and that any issues are resolved in a timely manner.
Can I use WebEquity if I’m based outside of Australia?
Yes, WebEquity is an online platform and is accessible to users worldwide. Whether you’re an entrepreneur or an investor, you can use WebEquity to connect with like-minded individuals from around the globe.
How can I get in touch with WebEquity for more information?
You can contact WebEquity through their website. They have a dedicated customer service team that can answer any questions you may have about their platform and services.
Josh CatoneBefore joining Jilt, Josh Catone was the Executive Director of Editorial Projects at Mashable, the Lead Writer at ReadWriteWeb, Lead Blogger at SitePoint, and the Community Evangelist at DandyID. On the side, Josh enjoys managing his blog The Fluffington Post.
