Equity for service, not cash refers to ownership granted to a developer, consultant, or partner in exchange for their professional input or time rather than financial capital. In UK property development finance, this is commonly used in joint ventures where a party provides expertise, planning, or project management instead of upfront cash. While this stake may be dilutive to other shareholders, it allows alignment of incentives and rewards active contribution. It’s often agreed early in the project lifecycle and may be formalised through shareholder agreements or vesting schedules.
In structuring terms, this form of non cash contribution is typically positioned within Developer Sweat Equity, but requires careful calibration of dilution, vesting, and performance triggers to ensure fairness across stakeholders. It is often contrasted with Phantom Equity (Profit Share Only), where no true ownership is transferred, highlighting a key difference in control and long term upside. Documentation must be precise, particularly where expectations of contribution or delivery are subjective, as disputes can give rise to claims under Misrepresentation. In operational terms, delivery against agreed milestones may be monitored using frameworks such as Planned Value (PV) to align equity entitlement with measurable progress.
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