WebEquity: Australia’s Sweat Equity Marketplace
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).