A Startup Asks: For Digital Marketing, Should I Give An Employee Equity or Pay for A Digital Marketing Agency?

When creating a startup, one has to balance getting the company off the ground and keeping expenditures to a minimum. In terms of determining whether to give equity to an employee or hiring a digital marketing agency, it depends on what phase of development your startup is at.

If your startup is in product market phase — you shouldn’t be spending any money on marketing to begin with let alone giving out equity. At this point, you aren’t entirely sure if the product has a customer base and how the market will respond. Instead of spending money on marketing, go out in the market and talk to customers, get feedback, and iterate accordingly.

Once you’ve achieved clear product market fit, you can determine whether bringing someone on board as an employee or hiring a digital marketing agency. The benefits of hiring an employee is control of activities and knowledge transfer. The benefits of hiring an agency is that you get a more holistic solution but at a higher cost. Or you can do a hybrid solution where you hire an employee and then contract a digital marketing agency to train your staff.

If you have money to pay for a digital marketing agency, it sounds like you have money to pay for an employee. Equity isn’t…