I am the sole founder of a bootstrapped startup (idea conceived by me, revenue model and business plan developed by me, and I filed a provisional process patent for the concept). I have incoporated as a Delaware C-Corp, and authorized 12M shares (10M common, 2M preferred). I have issued 6M shares to myself with an associated capital contribution of $60K.
I now need to hire software developers to build a proof of concept. I have had the work sceoped by a local developer who estimates 100 hours of work to get to a working prototype and his bull rate is $100/hr. This implies a conract value of $10K. This developer believes in the idea and concept so much that they are willing to take compensation in equity. I am cash strapped and welcome the idea of compensating in equity versus cash.
My question is this: and how much equity should be granted for this work and how should it vest? Thanks!