Red Herring this week ran an interesting article about a company called PeopleConnect. Basically, PeopleConnect helps high-tech startups hire pricey executives without actually having to pay them any cash. Angel Employees, like Angel Investors, invest their labor in exchange for an equity stake in the company. The companies, meanwhile, get top notch management while keeping their burn rate low.
As the article states, this is for people who like the “idea of working without pay at a startup without revenue, funding, or even a fully formed business plan in exchange for what basically amounts to a lottery ticket.” It’s the chance to work for a small, high-growth tech company that could either go bankrupt or turn into the next Google.
The firm has 15 clients and looks to fill two or three positions for each client at any given time. Once the manager goes on payroll, PeopleConnect collects 25 percent of the first-year salary of the managers it places as a finder’s fee. It also negotiates for a certain percentage of the startup’s options when it closes a financing round and sets a company valuation, usually less than 1 percent.
In taking a look at the positions available, it’s no surprise that the majority of companies are in California huddled around Silicon Valley. But, I did see some openings in Texas, Arizona, and New Mexico. While this is not a completely new idea, of course (since founders have always done this), extending it to more employees could be the next big thing in tech employment.
I didn’t see any attorney positions but I think this could be a good way to hire in expensive legal talent. The only issue is that attorneys tend to be a quite risk-adverse lot.
