Labor

The Experiment Funds can be applied toward hiring independent contractors (ICs) to provide key deliverables necessary for your experiments. This includes, but is not limited to programming, hardware prototyping, website development, technical consulting, etc.

You must still go through the pre-approval application first, and we only reimburse 80% of any expense.
The labor must be necessary for conducting an experiment that addresses a key risk to your venture. (e.g. testing out logo designs is not addressing a key risk to your venture)
The labor must be conducted by an independent contractor (IC), not an employee
The IC cannot be a current Stanford student
The IC must provide you with an invoice with their name/company, the service performed, a date, and the dollar amount owed (word to the wise, you should make sure you have all your ICs do this now and in the future, as it is an important part of remaining compliant with California labor laws)
The contract must be the minimum scope required to perform the experiment in question (e.g. no unneccessary bells, whistles, graphics or features)
The labor must be done near or below "market rate" (e.g. spending $200/hr for a junior developer would not be reimburseable)
The invoice must be paid by a student, not your company (we can't reimburse companies)

Requirements:

Please please please set up a formal, signed, standardized IC contract with your IC before any labor is performed. We cannot provide you with a contract to use, but you'll find many boiler-plate contracts online, and many of the law firms in the bay area are willing to provide these for free or low cost. Leave trust out of the equation entirely, by making sure all deliverables are specified as much as possible and have due dates in the contract.
When hiring IC programmers, please please please make sure you specify in the contract that it is a work-for-hire agreement, with all copyright and ownership of the source code belonging to you personally and/or your company. Also be sure that the source code files are part of the deliverables of the contract (this is very important). Please don't get into licensing agreements at this early stage unless absolutely necessary. Keegan has had lots of great experiences hiring ICs through Freelancer.com (not affiliated with Stanford in any way), and so feel free to reach out to him to learn more about it. (cooke@stanford.edu)
Make sure you educate yourself about your tax reporting requirements when hiring ICs. For example, if you may need to ask your IC for a W-9 and/or you may need to file a 1099 form if you pay them over a certain amount in a given year (typically $600).

Recommendations: (Disclaimer: None of the following constitutes legal advice)

"I already have an IC that I've hired for my company. Can we use the funds to pay for his/her labor?"

Yes, assuming all the requirements above are satisfied, including the fact that the IC must be paid from a student, not a company (we can only reimburse students, not companies).

FAQs:

Bottom Line:

If you're interested in IC labor reimbursements, come talk to us first before submitting any applications.