Swapping Equity for Services

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But before you start looking, take a step back and consider whether there are alternatives to diluting ownership of your company so early on, says Rhonda Abrams, president of the Planning Shop, a publisher of entrepreneurial books and software.

"I'd generally be very careful about swapping work for equity," she says. First, if your company does become a runaway success, the stock you swap now could become far more valuable than the work being done. Second, if you're planning to raise money from private investors down the line, your job will be more difficult if you've given away stock before getting funding. "Investors like clean deals," she notes.

Taking on a Partner

Take the plunge into swapping equity only if you can find a designer who is extremely talented and with whom you intend to continue working for a long time, Abrams advises. "Remember, if yours is a small business and you're not going to raise a lot of money or grow very big, then the person you're paying with stock is becoming a partner with you," she notes.

If you do find such a person and want to move forward, make sure you check references and do all the background checks needed, says Barbara Poole, founder and president of Employaid.com. Have an attorney draft an equity share agreement that spells out expectations for the hours, activities, and deliverables required of the service provider as well as how much stock he or she is getting in exchange.

If you decide not to go the equity-swap route, you may be able to barter products or services with a freelance Web designer. "If you're solely using the Web site for marketing, raise cash for the project or start with some of the fairly inexpensive off-the-shelf Web tools that are available today and enhance or add to it over time after a revenue stream is established," says Nick Soggu, president of SilverTech, a national interactive agency.

"I'm a big fan of the crawl, walk, run philosophy," Justen adds. "Get something in process now, and you can refine and revise it over time. There's a lot of inertia in a market like this. If you find somebody good and you start talking, sometimes solutions come out of new referrals and new relationships."

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.