A partner and myself are developing a new software product. We've been working on it for several months now but we lack certain areas of expertise -- in particular art skills. Everything has been sweat equity and we do not know if we'll seek or receive any outside money. The key fact here... there is no money coming in, and no money being spent on salaries. We can't hire anyone nor do we have a legal entity setup as our business yet.
So I visited a school that had a career day for their students and found a number of viable candidates that are very interested to work with us. However, doing research on "unpaid interns" makes me realize that in our situation, we just won't fit the criteria no matter how creative we get. I'd rather just find a fair way to structure any sort of arrangement that outsiders can be comfortable with.
My partner and I have agreed to split everything down the middle and we both unanimously agree on major decisions such as bringing someone else on board and what we will offer them.
My thought is really just find a way to include them as sweat-equity founders where nobody gets paid until the money comes in. I think it's fair to avoid "deferred salaries" and focus on awarding restricted equity of some sort based on relative contributions. We're really only 6 months out from shipping this thing, prior to now it's been a part-time side project, but now it's serious and full-time.
Does anyone have experience in this situation and would you be able to point me to the best and safest legal way to pursue an option like this? I'm leaning towards valuing sweat equity at a premium (+25% prevailing wages for time spent to sweeten the risk of startup failure).
The way I see it, if we start with 2 people and bring in 2 more people and nobody is getting paid until money comes in, then we're not breaking any laws, right? The startup is in WA state if that helps.
I really appreciate any help :)