I'm considering applying to a local incubator, and wanted some quick feedback regarding the following terms (assuming I get in). I've started by bootstrapping, and feel as though I need to dedicate fulltime to my product, but I'm currently employed fulltime and have a mortgage/wife to pay for, so this would give me a few months of breathing room.
You receive $25k, free office space, and mentorship/introductions over 3 months for an eight percent equity stake in the company and a royalty of 2.5 percent, capped at $150,000.
I'm not familiar with what the royalty component is, but 8 percent seems to be about average for incubators.
Any thoughts on whether this is good or bad? Has anyone participated in a similar situation?
Any and all advice/feedback is appreciated. Thanks!
