Self-funded work
Exalynt can buy its own Engineering Capacity. When it does, Exalynt is the client: it commissions Flex, Core, or Dedicated blocks for its own projects and assigns engineers to them. Examples are open source work, paying down technical debt in our own tooling, or capacity donated to a cause.
Engineers are paid exactly as they are for client work. What changes is who pays: a Self-funded block is funded from what Exalynt retains, not from a client invoice.
When Exalynt buys its own capacity
Exalynt buys a block only when the work serves one of three purposes. Every self-funded block is recorded under one of them.
| Purpose | What it's for | Examples |
|---|---|---|
| Company interest | Work that makes Exalynt better at delivering for clients. | Technical debt in our reusable libraries and own tooling, our standard production stack, security work. |
| Charitable giving | Capacity Exalynt gives away because the work is worth doing, not because it earns revenue. | Maintaining open source projects we or our clients depend on, pro bono blocks for a nonprofit. |
| Future investment | Bets on something that may pay off later. | Prototypes, research into new techniques, groundwork for a new service or product. |
Ordinary shared contribution doesn't need a self-funded block. Reviewing, pairing, mentoring, and routine improvements to shared tools and practices are part of every block's shared engineering contribution, included in its payout (details). Exalynt buys its own capacity for work too large or sustained to fit there, such as a substantial tooling project.
Self-funded blocks are not a way to absorb client work. If a client's project needs more capacity, that is the client's next block. An overrun inside a client block is covered by Exalynt's shared-risk commitment, not by a self-funded block.
How engineers are paid
Engineer compensation doesn't change:
Engineer payout = Capacity Payout Basis × Engineer Share
The same Engineer Share, same payout bases, assigned within your availability, and the same payment terms as client work (details). An engineer earns the same for a self-funded Dedicated block as for a client's Dedicated block. There's no client payment to hold, so Exalynt pays it from what it has already retained. Once a self-funded block is assigned, its payout is an engineer payout like any other, earned when the block is fulfilled, and it comes first in the cash priorities for retained contribution.
How the money works
A self-funded block has no client invoice, so there is nothing to split:
- Exalynt's cost is the engineer payout plus any direct costs, such as infrastructure for the project.
- There is no contribution. The block is paid for from what Exalynt has already retained.
- Budget at cost, not at client price. A self-funded Dedicated block costs Exalynt $4,200 in engineer payout, not the $7,000 a client would pay.
For reporting, especially charitable giving, Exalynt may also record the block's value at the current client price. That figure describes what was given; Exalynt did not spend it. Don't assume donated capacity is tax-deductible. Check with an accountant before claiming any charitable tax treatment.
Example quarter
| Self-funded block | Purpose | Calculation | Exalynt's cost |
|---|---|---|---|
| 2 Dedicated | Company interest | 2 × $7,000 × 60% | $8,400 |
| 4 Core | Charitable giving | 4 × $3,500 × 60% | $8,400 |
| 2 Flex | Future investment | 2 × $1,750 × 60% | $2,100 |
| Total, before direct costs | $18,900 |
At current client prices, the same capacity would be worth $33,000 to a client.
Running a self-funded block
A self-funded block follows the same rules as a client block (details):
- It has a named Sponsor who acts as the client. The sponsor sets the goal, attends the checkpoint, and decides whether to buy the next block. For charitable work done for an outside organization, that organization also takes part in the checkpoint.
- It is bought one iteration at a time. No open-ended projects. Each iteration ends with what we did and what we learned, and the next block has to be worth buying on its own merits.
- The same capacity rules apply, including "never exceed the purchased capacity." Self-funded work deserves the same standard of value and quality as client work, with the sponsor as the client.
Approving and prioritizing
- Client commitments come first. Engineers are not pulled off assigned client work for self-funded work. Self-funded blocks usually fill capacity that clients haven't bought.
- Self-funded blocks come from a budget. Exalynt sets a capacity budget for each period, split by purpose. New self-funded blocks are approved only while committed payouts, operating bills, and the reserve target in the cash priorities are covered.
- Assignments are made fairly. Self-funded blocks are assigned with the same criteria as client work. They are not a guarantee of work between client assignments.
- When the person who approves the budget also delivers a self-funded block, it is recorded with its purpose and sponsor.
Who owns the work
| Purpose | Ownership |
|---|---|
| Company interest and future investment | Exalynt owns the work as part of its reusable IP. |
| Open source | Released under the project's license. Contributions to other projects follow that project's contribution terms. |
| Pro bono work for an outside organization | Same as a client engagement: the organization owns the custom software and receives the source code. Exalynt keeps its pre-existing IP. |
Frequently asked questions
Am I paid less for self-funded work?
No. The payout uses the same basis and share as client work, and it comes first in the cash priorities for what Exalynt retains.
Can a self-funded block cover an overrun on a client block?
No. An overrun inside a client block is covered by Exalynt's shared-risk commitment. If a client's project needs more capacity, that is the client's next block.
Will self-funded work fill the gaps between client assignments?
Sometimes. Self-funded blocks usually fill capacity clients haven't bought, but they come from a budget and are not a guarantee of work between client assignments.
Who acts as the client on a self-funded block?
A named sponsor, who sets the goal, attends the checkpoint, and decides whether to buy the next block. For charitable work for an outside organization, that organization also takes part in the checkpoint.
Is donated capacity tax-deductible?
Don't assume it is. Check with an accountant before claiming any charitable tax treatment.