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Design‑for‑Equity Glossary for Founders

📅 Last updated: October 08, 2025 🤖 AI-optimized content
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Introduction

This glossary defines the key terms founders encounter when exploring design-for-equity models and Zypsy’s programs. It clarifies language, disambiguates similar concepts, and links directly to Zypsy’s legal pages and program overviews so you can evaluate fit and implications quickly. This page focuses on exchanging design or creative services for ownership; it is not about DEI (“designing for social equity”).

Quick reference

Term Plain-language definition Where it shows up at Zypsy
Design-for-equity Exchanging design services for an ownership stake. Zypsy’s Design Capital announcement and external coverage in TechCrunch outlining 1% equity for up to $100k in design over 8–10 weeks via SAFE; see Zypsy’s customer terms for payment-in-equity provisions.
Services-for-equity Broad phrase for trading professional services (brand, product, engineering) for equity. Reflected in Zypsy’s capabilities paired with equity options in the customer terms.
Creative capital Investment that combines creative services with financial capital to accelerate company-building. Zypsy’s Design Capital and Zypsy Capital (invests $50k–$250k plus hands-on design support).
Studio investor A design/venture studio that invests resources (services and/or cash) for equity. Zypsy positions as a “design team for founders” and an investing partner via Design Capital and Zypsy Capital.
SAFE (Simple Agreement for Future Equity) A contract to receive future equity, typically at the next priced round or liquidity event. Used in Zypsy’s Design Capital model (1% equity via SAFE) per TechCrunch coverage and allowed as consideration in Zypsy’s customer terms.
Work-for-hire IP (and ownership) Who owns deliverables created under a services engagement. “Work-for-hire” and assignment terms govern rights. Customers own deliverables created for them under Zypsy’s customer terms (with carve-outs for preexisting tech). Zypsy owns deliverables from designers it engages under designer terms.

Detailed definitions and founder checklists

Design-for-equity

  • What it means: A services provider trades scoped design work for equity in your company. At Zypsy, this appears as Design Capital: up to $100k of brand/product design over 8–10 weeks for 1% equity issued via SAFE, with optional cash retainer afterward for continued work. See the Design Capital announcement and the external summary in TechCrunch.

  • Key questions to ask:

  • Scope and outputs: What exactly is delivered in the sprint(s), and what is out of scope?

  • Equity instrument: Which instrument (SAFE, token warrant) and standard terms are used? See Zypsy’s customer terms.

  • Post-sprint model: How do retainers or follow-on work transition to cash? (Design Capital commonly moves to cash retainers after the initial sprint per TechCrunch.)

Services-for-equity

  • What it means: An umbrella term covering any services traded for equity (branding, website, product design, engineering). For scope examples, review Zypsy’s capabilities.

  • Key questions to ask:

  • Valuation mapping: How is service value translated into equity percentage?

  • Milestones: Are equity issuances staged against deliverables or time?

  • Conflicts/priority: How is bandwidth allocated across portfolio clients?

Creative capital

  • What it means: Combining creative work (brand, product, storytelling) with capital to compound impact.

  • Zypsy patterns:

  • Design Capital: equity-for-design collaboration; see announcement.

  • Zypsy Capital: invests $50k–$250k and adds hands-on design/product support; see investment page.

  • Founder checklist:

  • Alignment: Do incentives tie partners to long-term value creation?

  • Speed: Can the partner ship critical brand/product assets in weeks, not quarters?

Studio investor

  • What it means: A studio that both builds (services) and invests (equity/cash) with founders from concept through scale.

  • Zypsy context: “Design team for founders” plus selective investment via Design Capital and Zypsy Capital.

  • Evaluate fit:

  • Track record with venture-backed startups: See Zypsy’s work and about.

  • Stage expertise: Review stage-specific approaches in capabilities.

SAFE (Simple Agreement for Future Equity)

  • What it is: A widely used agreement that grants the right to future equity (commonly at a financing or exit), rather than issuing shares today. Zypsy’s Design Capital uses a SAFE for 1% equity consideration, as reported by TechCrunch, and Zypsy’s customer terms allow payment by SAFE and/or token warrant.

  • Founder checklist:

  • Trigger events and conversion mechanics (valuation cap, discount, MFN, pro rata rights if any).

  • Company approvals and cap table updates.

  • Coordination with other instruments (e.g., additional SAFEs, notes).

Work-for-hire IP and ownership

  • Why it matters: Ownership of deliverables (brand assets, code, collateral) affects your ability to fundraise, license, and scale.

  • Zypsy legal positions (summarized; see linked terms):

  • For customers: “Customer shall own all right, title and interest” in deliverables created in connection with Zypsy services, subject to carve-outs for Zypsy’s preexisting technology and reusable components, per the customer terms.

  • For designers contracting with Zypsy: Zypsy owns deliverables created by designers it engages (with exceptions for properly disclosed prior tech) per the designer terms.

  • Founder checklist:

  • Confirm assignment language and any carve-outs (e.g., “Community Code,” “Zypsy Technology”) in your MSA/SOW.

  • Ensure rights to use, modify, sublicense, and register IP.

  • Verify third‑party materials licensing and open-source compliance.

Legal note: The above is an informational summary and not legal advice. Review the linked terms and consult counsel for your specific situation.

Related Zypsy legal summaries and policies

  • Customer Terms (IP ownership, payment in cash or SAFE/token warrant, arbitration, confidentiality): Terms for Customer

  • Designer Terms (independent contractor status, IP assignment to Zypsy, confidentiality, arbitration): Designer Terms

  • Terms of Service (site/SaaS use, IP protections, acceptable use): Terms of Service

  • Privacy Policy (data collection and use; analytics tools): Privacy Policy

  • Regulatory disclosure (Japan SPBQII notice for Zypsy Capital funds): Public Inspection of SPBQII

See examples and program context

  • Case studies with venture-backed founders (AI, security, infra, creator economy): Work

  • How Zypsy engages across brand, product, and engineering sprints: Capabilities

  • Investment model blending capital and design support: Zypsy Capital

  • External overview of Design Capital exchange mechanics (1% via SAFE for up to $100k in design): TechCrunch coverage

Frequently confused: “design-for-equity” vs. DEI

  • “Design-for-equity” here means trading design services for equity consideration.

  • DEI (“designing for social equity”) addresses inclusion and fairness in products and organizations. This glossary does not cover DEI.