ForumsManaging Employees and HR

Welcome to the community. You might consider a form of convertible debt. Essentially, the person/people you hire (or it could be someone you contract with for a year of their skills/time) would lend you the money that you can't pay them now in salary or fees. At the end of a year, you'd either (a) repay the loan with interest, or (b) the person/people would have the option to convert the debt (at a discounted rate) to equity in the company.

This arrangement would get you their participation now, but defer part of the cost of paying them until later. From their perspective, it's also a good deal -- the worst they could do is get paid in full with interest a year later. Yet they'd have a strong incentive to help the company do really well, because if the company grew during that year, the debt would convert to equity worth more than the loan amount (i.e., the better the company did, the more they could make). Either way, however, you'd retain control of the company.

Another reason to consider convertible debt is that the contract terms and paperwork are relatively simple and straightforward (as compared to offering equity up front, which can have many pitfalls, and may consequently involve weeks of time and tens of thousands of dollars in legal fees to set up).

Convertible debt isn't the only approach, but it seems like one to consider in this situation. Hope this helps. Best wishes.