14 Tips for Freelancers to Safely Accept Stock or Equity as Payment

Recently, a writing coaching client asked if they could pay me in cryptocurrency. I politely declined, but it got me thinking about other ways freelancers could accept payments.

And to my surprise, some freelancers DO get paid in crypto. And some accept stock or equity.

Stock is simply one type of equity, but I’m using both terms here since freelancers might encounter them in different forms, depending on the business structure.

But this isn’t the norm, and it’s extremely important to be cautious when accepting anything other than cold hard cash.

Let’s take a closer look at stock, equity, crypto, and how to accept payments as a freelancer. (Safely.)

Highlights

• Freelancers can be paid in cash, stock/equity, or cryptocurrency. But cash is the safest and simplest option.

• Stock vs. equity: Stock is one type of equity that gives company ownership. Equity is broader, including LLC units and founder or investor stakes.

• Stock or equity can provide big gains, diversification, and stronger relationships. But carries high risk, illiquidity, complex taxes, and delayed payouts.

• Risks can be reduced by assessing cash flow, reviewing agreements, and verifying valuations. You can also negotiate partial cash payments, use analytics tools, and maintain accurate records.

• Non-equity options include bank transfers/ACH, credit/debit cards, digital wallets (such as PayPal and Google Pay), wire transfers, pay links, and recurring billing.

What are stock payments?

Stock payments usually refer to compensation or transactions made using a company’s stock (shares) instead of cash.

For example, companies may issue stock to employees (stock options, restricted stock units, or performance shares) as part of their pay package. Vendors, partners, or executives might also receive stock instead of direct cash payments.

Some freelancers accept stock payments instead of cash, essentially trading their work for a stake in the company. This can be risky, but it offers an upside if the company’s value increases.

What is equity?

Equity is compensation given in the form of ownership in a company. (Such as shares or membership interests, instead of cash.) They’re common in startups that want to conserve cash while rewarding employees, advisors, or contractors with a piece of the business.

Some freelancers accept equity payments in place of cash. Again, this means they’re betting on the company’s future success.

Let’s compare the differences below.

Stock payments vs. equity

Here’s a quick overview of stock payments versus equity:

Stock payments:

1. A method of payment or compensation where stock is used instead of cash.
2. Often tied to performance or tenure (e.g., you might earn stock if you stay at a company for a certain number of years).
3. Can be granted, vested, or exercised depending on the structure.
4. Employees, freelancers, or stakeholders receive shares they can eventually sell, giving them ownership in the company.

Equity:

1. Refers to ownership in a company, measured by shares.
2. Broader concept than stock payments — it includes founder ownership, investor stakes, and retained earnings.
3. Equity shows the value left for shareholders after liabilities get deducted from assets.
4. It’s not solely compensation. It’s the entire ownership structure of a business.

In other words, stock payments are just one slice of the equity world. Equity itself covers all ownership, no matter how it was created or who holds it.

• If you’re paid in stock, you automatically end up with equity (ownership).
• But not all equity is stock. For example, in an LLC you might get membership units instead of stock. It’s still equity, just a different form.

What about cryptocurrency?

A cryptocurrency is a digital or virtual currency secured by cryptography, like Bitcoin or Ethereum. Unlike stock, it doesn’t represent ownership in a company. Its value comes from market demand, utility, or network adoption.

Not from company profits or assets.

If a client offers crypto instead of cash, you’re getting a digital asset, not ownership.

If they offer stock, you’re getting shares that give you equity.

Both can grow in value, but stock/equity ties you to the company’s success, while crypto’s value depends on market trends.

Should freelancers accept stock or equity payments?

Freelancers can accept stock or equity. But it’s not a decision to take lightly.

Below, I’ll share some pros and cons to consider if you’re thinking about accepting these kinds of payments.

Pros

Here are some of the pros of accepting stock or equity in place of cash:

Potential for big gains

I’ve seen startups take off, and those shares that seemed small at first can end up being worth a lot.

Feeling invested

Owning a piece of the company can make you care about its success in a whole new way. This may inspire you to do even better work to help them succeed, making it a win-win for everyone.

Portfolio diversification

Adds an investment component to your income.

Cons

And here are some cons to watch out for:

High-risk

I’ve also seen startups fail, which can leave your “payment” worthless.

Hard to cash out

Sometimes you can’t sell the shares right away, so the money isn’t really in your pocket.

Tricky rules

Vesting schedules, taxes, and ownership rights can be confusing. Consider reaching out to established firms like Abacus Global for investment guidance. They can help you assess equity value, diversify holdings, and decide whether to hold, sell, or reinvest.

Delayed payoff

Unlike cash, it can take years to see any real value from your equity. This may not be worth your upfront effort.

Is it possible to safely accept stock or equity as payment?

Yes, it’s possible to safely accept stock or equity as payment. But it requires careful planning and risk management.

Make sure to understand the company’s:

• Vesting schedule
• Legal protections
• Tax implications
• Liquidity options
• Share type
• Valuation
• Stage

Combining partial cash with equity, using reliable analytics tools, and documenting everything can help protect financial interests.

Real-world examples where freelancers or early contributors who accepted stock or equity could have benefited significantly

Imagine being a freelancer with stock or equity in the companies listed below! 🤩

Google

Early employees and contractors who received stock options or equity stakes saw massive returns when Google went public. Even small equity grants can turn into millions of dollars.

Airbnb

Freelancers, designers, or consultants who worked with Airbnb in its early days and took equity instead of cash could have cashed out well after the company’s IPO.

Facebook (Meta)

Contractors or collaborators who accepted stock early on would have seen exponential growth in their holdings.

Especially leading up to and following Facebook’s IPO.

Tesla

Early advisors, engineers, or freelancers who accepted equity could have benefited from Tesla’s skyrocketing stock price over the past decade.

💡 Key takeaway: The biggest gains often come from early-stage companies that grow rapidly, but this is also high-risk — many startups fail entirely.

Tips to safely accept stock or equity as payment as a freelancer

Freelancers can safely accept stock or equity as payment if they take informed and careful steps.

Here are the top strategies:

1. Assess financial risk tolerance

Equity can take years to pay off — or become worthless — so it should complement, not fully replace your cash for essential expenses.

Double-check to make sure you can really afford a delayed payment.

And set boundaries on the percentage of compensation you’ll accept as equity versus cash.

2. Understand the company’s stage and prospects

Early-stage startups carry a higher risk but can offer significant upside. Established companies provide stability but typically have less growth potential. Analyze the business model, market opportunity, competition, and leadership track record to gauge realistic outcomes.

Here’s a SWOT analysis template that might be helpful to you:

3. Request a detailed equity agreement

You need a written contract specifying share type, number of shares, vesting schedule, transfer restrictions, and exit provisions.

Have a lawyer review it to ensure the terms are enforceable and protect you against any surprises. (Like forfeiture clauses or unexpected dilution.)

4. Verify company valuation

Avoid accepting equity based on vague or inflated numbers.

Request the latest financial statements, valuation reports, or an independent appraisal to understand the real value of your stake.

5. Plan for taxes upfront

Equity compensation can trigger taxes at grant, vesting, or sale. Consult a tax professional to understand obligations, reporting requirements, and potential strategies to minimize liabilities in your jurisdiction.

6. Clarify share class and rights

Common and preferred shares differ in voting power, liquidation preferences, and dividends.

Understand exactly what your shares entitle you to, including rights in acquisition scenarios, to avoid not-so-fun surprises later.

7. Negotiate pro-rata and anti-dilution protections

Pro-rata rights allow you to retain your ownership stake during future funding rounds. And anti-dilution clauses protect your stake against excessive dilution. Add these terms to your freelance contracts to safeguard your long-term value in the company.

8. Use analytics and portfolio management tools

Platforms like LuxAlgo offer real-time market insights, trading indicators, and actionable analytics.

You can use it to track your holdings and make informed decisions on when to sell or hold, thereby protecting and growing your equity value.

9. Ensure liquidity and exit clarity

Equity is often illiquid.

Make sure to confirm how and when you can sell shares. (Including secondary market options, buyback clauses, or IPO timelines.)

Knowing your exit paths helps you plan your cash flow and reduce financial uncertainty.

10. Assess cash flow needs

Take an honest look at your cash flow requirements.

How much do you need to pay your subcontractors, if you have any? What about your monthly tech stack? Or, personal expenses, like rent or student loans?

If you have educational debt, use a student loan calculator to see exactly how much you need in cash flow each month to stay on top of your obligations. This’ll help you know whether equity compensation alone is sustainable — or if you should negotiate for at least partial cash payments.

11. Conduct thorough due diligence

Investigate company finances, leadership, industry trends, and market stability.

Understanding risks like sector disruption or competitive pressures is pivotal to assessing the potential long-term value of equity.

12. Keep detailed records

Document agreements, communications, vesting updates, and valuation changes. Detailed records help protect rights and provide evidence in the event of disputes.

13. Prepare for psychological and professional implications

Equity payments often require patience and mental resilience.

Liquidity events can take years — or may never happen. Additionally, some equity arrangements can blur the line between freelancer and employee. This can affect your taxes and professional obligations, so meet with a pro to iron this out.

14. Leverage equity as relationship capital

Holding equity ties your financial outcome to the company’s success. This may help you strengthen business relationships and open doors for future work or referrals.

When to say yes and when to say no to equity compensation

Here are three scenarios where accepting stock or equity as payment could make sense:

• High-growth startup with strong potential: If a small company is showing strong traction, a solid business model, and experienced leadership, the equity could grow significantly in value.

This offers you an upside well beyond cash payment.

• Partial cash plus equity arrangement: You receive enough cash to cover living expenses, while also taking equity. This reduces your financial risk, while keeping the potential for long-term gains if the company succeeds.
• Strategic relationship or long-term collaboration: Accepting equity ties your success to the company’s growth. Great for securing future opportunities.

Here are three scenarios where accepting stock or equity as payment could be risky for freelancers:

• Early-stage startup with uncertain prospects: If the company has an unproven business model or weak leadership, the equity could end up worthless, leaving you uncompensated for your work. 😖
• Equity-heavy payment with insufficient cash: Relying mostly on equity without enough cash to cover living expenses or debts can create financial strain and stress.
• Illiquid shares or unclear exit options: If there’s no clear path to sell or transfer the equity, your ownership may not convert into usable funds for years. Or ever.

That said, let’s take a look at some other ways to get paid as a freelancer. 👇

How to accept payments as a freelancer (non-stock or equity)

Freelancers have plenty of options for getting paid in cash.

Choosing the right payment methods can make a big difference for cash flow, security, and convenience.

I personally prefer using Wise or ACH because the fees are lower and the money hits faster.

Here are some of the most common ways you can accept payments as a freelancer:

1. Bank transfers and ACH

Direct bank transfers or ACH transfers are reliable for domestic payments. They usually have lower transaction fees than credit cards, and funds typically arrive within a few business days.

This is ideal for recurring client work or larger invoices.

2. Credit and debit cards

Accepting credit card payments gives clients flexibility and helps you get paid quickly.

Use PCI DSS-compliant payment platforms to keep card data secure. Popular options include Stripe, Square, or integrated checkout pages on your website.

Please note that this is often the most expensive way to get paid, fee-wise.

3. Digital wallets

Platforms like Google Pay, PayPal, and Apple Pay let clients pay you instantly from their phones or computers. Digital payment options are convenient and often used for international transactions.

However, you’ll need to determine the best way to set this up, as it’s not always straightforward.

For example, you may need to set up PayPal, Stripe, or Square accounts, link your bank, verify your identity, and configure currency and fees to ensure smooth, secure payments.

4. Wire transfers

For international clients, wire transfers or electronic funds transfer (EFT) let you receive funds safely across borders.

(Be aware of bank fees and exchange rates, and confirm payment protection measures before accepting.)

5. Payment links and invoicing tools

Many of my freelance friends use invoicing software that generates pay links.

Clients can click a link to pay via card or digital wallet. You can also set up automated reminders to help promote timely payments. Tools like QuickBooks, FreshBooks, or Wave combine invoicing with payment processing.

But make sure the fees are worth it to you!

6. Autodebit and recurring billing

For ongoing work, auto-debiting clients’ accounts or setting up recurring invoices can simplify cash flow. These payment systems automatically charge the client at regular intervals, which can reduce late payments and help you keep a steady income.

*Pro-Tip: Always factor in transaction fees, international exchange rates, and security measures when selecting payment methods. A mix of options gives your clients flexibility and protects your cash flow.

Wrap up

Freelancers have many ways to get paid.

Traditional options include bank transfers, credit cards, and digital wallets.

Alternative methods include cryptocurrency, stock, or equity.

Cash is the safest and most reliable, but stock or equity can offer big upside if approached carefully. (Understanding the company, negotiating terms, tracking holdings, and keeping detailed records help protect your financial interests.)

The right payment method depends on your cash flow, risk tolerance, and long-term goals.

Choose options that offer security and stability and seek professional advice when needed to ensure you’re compensated fairly.

Psst … Want to streamline your freelance payments and get expert tips on managing clients and cash flow?

Check out Millo for resources, tools, and guides to help you run a smarter freelance business.

FAQs: How to accept payments as a freelancer (including stock and equity)

1. What are the safest ways for freelancers to get paid?

Use trusted methods like PayPal, Wise, bank transfers, Stripe, or escrow services to promote secure transactions.

2. Can freelancers accept equity as payment?

Yes, but it carries risks like illiquidity, complex tax implications, and potential loss of value.

3. Should freelancers require a contract before starting work?

Freelancers should always require a contract before starting work. A contract protects both parties by outlining payment terms, scope, deadlines, and deliverables.

4. How can freelancers avoid late payments?

Freelancers can prevent late payments by using clear payment terms, requiring deposits upfront, setting milestones, and sending polite reminders for overdue invoices.

5. What payment methods are best for international clients?

PayPal, Wise (formerly TransferWise), and international wire transfers are common and reliable options for international clients.

6. Is it okay to ask for a deposit before starting a project?

Yes, requesting a deposit before starting a project reduces risk and promotes client commitment.

7. How do freelancers handle taxes on client payments?

Track all income and consult a tax professional to comply with local tax laws and reporting requirements.

8. What should I include in a freelance invoice?

In your freelance invoices, be sure to include your contact info, client details, project description, payment terms, invoice number, and total amount due. You’ll also need to list the payment method and your bank account information if you choose ACH.

9. Can freelancers accept cryptocurrency payments?

Yes, freelancers can accept cryptocurrency payments. But cryptocurrencies can be volatile and may have tax or legal considerations depending on your jurisdiction.

10. How do freelancers protect themselves from payment disputes?

To protect themselves from payment disputes, freelancers use clear contracts, maintain communication, and document work progress. They might also consider escrow services or payment platforms with dispute resolution.

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