Case Study
Building a Startup Product
with Restricted Funds
Raised capital earmarked for product development,
but legally restricted from hiring W-2 employees.
01
The Situation
A crypto trading startup successfully raised seed funding but faced a critical constraint: the investment terms earmarked capital specifically for product development with restrictions preventing its use for W-2 employee salaries. This created a challenging situation:
- Restricted fund structure prohibited hiring in-house developers
- Technical co-founders lacked bandwidth to build production application alone
- Sweat equity approach wouldn’t deliver professional-grade product on investor timeline
- Market window closing required rapid, high-quality delivery
- Team maturity gap needed experienced developers for complex trading infrastructure
02
The Core Problem
The startup needed professional development capacity but couldn’t hire employees. They needed a way to deploy their raised capital compliantly while building a production-ready application.
03
The Approach
Hoyack provided agency-based development services that enabled compliant use of restricted funds while delivering professional product development:
Fund Structure Compliance
- Structured engagement as third-party contractor services (not W-2 employment)
- Enabled legal deployment of restricted capital for product development
- Satisfied investor requirements and fund usage restrictions
Professional Development Delivery
- Assembled experienced team for crypto trading platform development
- Built production-grade application with proper architecture and security
- Delivered on investor timeline with quality the founders couldn’t achieve alone
Team Transition Support
- Established development processes and documentation
- Provided foundation for eventual in-house team build-out
- Created hiring blueprint based on actual product architecture and needs
The startup turned a fund structure constraint into an advantage, gaining experienced development capacity they couldn’t have hired directly while staying compliant with investor terms.
04
The Outcome
The startup successfully deployed their restricted capital and achieved their product goals:
Have Restricted Funds that Can’t Be Used for W-2 Hires?
Contact Hoyack to discuss how agency-based development can help you deploy capital compliantly.
