See this interesting blog posting about the value of a Consulting CTO. Consulting CTO’s can help you out on a short term basis; generally for small amounts of equity.
Depending on the type and amount of work; you will end up giving 25,000-100,000 stock options (where you have 10 million outstanding @ .01 – .10 cents). These will generally vest based on the terms of engagement and deliverables you require from the freelance / consulting CTO.
My recommendation; as someone who actively plays this role for multiple startups is to be very clear up front on the scope of involvement, deliverables and compensation. Startups are by nature fluid. The core team and all need others involved to be flexible; but putting some structure around this at the beginning can lead to a successful relationship long term.
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All of us have had challenges with IT projects and the “fluid” nature of requirements. Having frozen requirements is a fallacy. I was reading about Six Sigma and found this interesting piece of data that I thought I would share.
Donald Reinertsen from the California Institute of Technology has been collecting data from product development managers who attend his classes. (Basic data are from Thomke and Reinertsen’s “Agile Product Development,” updated via personal communication with Donald Reinertsen, December 11, 2006). Note: I got this from a book on Six Sigma and am sharing since I think it will be exciting for all us software professionals.
Out of hundreds of projects, how often did the requirements remain stable throughout design?
Never
How many developers had complete specifications before starting design work?
5 percent
On average, what proportion of requirements were specified before design commenced?
54 percent
For each developer who waits for at least 80 percent of the requirements, how many have already started designing?
Five
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