Equity for Development? Here’s How We Think About It at NobleNest
Why We Focus on Upfront Payments Over Equity in Startups
Graphic created by NobleNest
In the world of software development, especially with startups, it's not uncommon for us to receive offers to take on equity in place of a smaller development fee. We get it—cash flow can be tight for new businesses, and equity can feel like a win-win. We appreciate the offer, and it’s always flattering to be invited into someone’s vision in this way. But as tempting as it sounds, here’s why we at NobleNest typically prefer sticking to our standard development fees.
1. Startups Are Risky—Even the Best Ideas Aren’t Guaranteed
Startups are full of potential, but they’re also famously high-risk. In fact, statistics show that many startups don’t make it past their first few years. That’s not a dig at anyone’s idea or passion; it’s just the nature of the startup world. There are countless factors at play—competition, market shifts, funding challenges, and even just getting the timing right. When we’re offered equity, we have to consider that we’re tying our time and resources to an uncertain future.
We’re rooting for every client we work with. We want your project to thrive, and we’re committed to building it with as much care and precision as possible. But we also have to be realistic and make decisions that keep our business stable, too. That means ensuring we get paid for the time, skill, and resources we’re putting into a project.
2. Execution and Growth Matter More Than Just the Idea
Having a great idea is a fantastic start, but it’s only one piece of the puzzle. A lot of what makes a startup succeed is in the execution—how well the product is marketed, how the customer base is grown, and how the initial buzz is translated into long-term success. Even the best ideas need a great team to bring them to life.
From our perspective, we’re here to build the best version of your vision and hand it off, polished and market-ready. But beyond that, we’re not directly involved in the critical factors like securing additional funding, scaling the user base, or handling ongoing marketing. These are the things that take a startup from a great concept to a thriving business. When we’re asked to take equity, it’s essentially asking us to invest in these downstream aspects—things we don’t control.
3. Equity Takes Time to Pay Off (If It Ever Does)
One of the realities of equity is that it’s a long game. For equity to turn into actual revenue for us, it usually requires a major event like the startup taking on outside funding or achieving a successful exit through acquisition or IPO. That process often takes years, sometimes five, ten, or more, if it even happens at all.
On the other hand, by collecting a development fee, we’re able to cover our team’s costs, fund our resources, and invest in more projects in the short term. It allows us to keep our cash flow healthy and stable. We’re here to support your vision as your development partner, but for us to keep bringing the best to each project, it’s important to be financially stable, and that’s why we typically prioritize immediate payment over waiting for potential future returns.
4. We Believe in Your Project—Which Is Why We’re Here in the First Place
We’re selective about the projects we take on, and that’s because we genuinely want to see our clients succeed. If we’re working on your app or idea, it’s because we see potential in it and believe there’s a chance for it to thrive. But to make the business work for both sides, we need to ensure we’re properly compensated for the work we put in.
We’re just as committed to building a strong, high-quality product when we’re being paid upfront. Our dedication and investment don’t change based on the financial model. At the end of the day, we want to provide you with the tools to succeed without tying up our resources in risky financial arrangements.
5. Staying Clear of Legal Liabilities and Business Partnerships
One of the other major considerations for us when it comes to equity is legal liability. Becoming an equity partner in a startup can open us up to potential liabilities, obligations, and responsibilities we wouldn’t normally face as an independent development partner. If we hold equity, we’re no longer just the development team—we’re technically part of the business, and that carries legal implications.
By keeping our role straightforward—building, delivering, and supporting your software—we can maintain a clear separation from your business, which is often in everyone’s best interest. It allows us to focus on what we do best: creating robust, high-quality software that helps you put your best foot forward.
Our Support Comes Without Strings
When it comes down to it, we’re in this business because we love bringing ideas to life, and we want to help startups make their mark. Our approach is to support you wholeheartedly in creating a great product without the entanglements that come with equity. This approach keeps things simple and lets us stay fully focused on your project’s success without stretching ourselves thin financially or legally.
To Sum It Up
Equity offers can be tempting, and we understand why startups look to this model as a way to bring in the talent they need while keeping upfront costs manageable. But at NobleNest, our focus is on building, delivering, and helping you launch without complicating the business relationship.
So if we decline an equity offer, it’s not because we don’t believe in you or your idea. In fact, it’s quite the opposite—we want to give you our best work while keeping our business sustainable. We’re here to support you and see your project succeed without having to compromise on stability. Here’s to creating amazing software together, with each of us focused on what we do best!
