2

I'm scheduled for an interview with a data analytics startup that may not initially pay a salary. I tried to check their website, but it's not even set up yet. This is around the Silicon Valley area, if it matters.

A "data engineer" role would give my resume a much-needed boost -- how would you advise me to proceed, if their offer includes asking that I work for free for a certain number of months?

  • 1
    What makes you think they won't offer cash money? Who told you about position if it's not posted on their site? – Mirv - Matt Jan 15 at 19:30
  • 3
    @JoeStrazzere: "Equity in lieu of pay" is one of the biggest, most notorious ripoffs in the Valley. Key word "dilution": what happens to your equity when the vulture capitalists decide to issue more stock. – John R. Strohm Jan 15 at 22:03
  • 4
    Minimum wage in California is $11/hr. Zero is less than eleven. – Acccumulation Jan 15 at 22:22
15

So there are two things here. First off:

You should not have to work for free as an engineer in Silicon Valley.

My general advice is "if you are doing work, you should be paid for it". You should not feel that you need to work for free in order to establish a resume or a career. There's more than enough opportunity for you to build yourself up while also putting food on the table.

However, if you are really committed to this position for some reason:

Get a contract and make sure it is extremely detailed about payment.

You need to make sure that they don't take a temporary situation and extend it indefinitely in order to take advantage of you. When you're interviewing with them, make sure you clarify exactly how long you would be working without pay, and how they will make it up to you once the company is profitable. Make sure that these terms are agreeable to you, and if they're not, negotiate until they are. Then, put all of that into writing, and make sure you both sign it. Do not make a verbal agreement to anything, and always make sure you have an opportunity to leave if you want or need to. If you are uncomfortable with any part of a job that isn't paying you, walk away and don't look back.

  • I was with you until the middle - how they will make it up to you once the company is profitable - if you are going to work for free at a startup - that's a partnership – Mirv - Matt Jan 15 at 19:55
  • 3
    @Mirv Nothing is partnership until put on paper and signed by both parties – Strader Jan 15 at 21:19
  • 1
    @Strader - I'm glad you agree with me & think they should that it should be a formal arrangement if they aren't hiring a fulltime employee! – Mirv - Matt Jan 15 at 21:51
  • 4
    A third thing: If they really are trying to offer unpaid work, then they're probably trying to exploit some kind of loophole in the relevant minimum wage laws - that may provoke an enforcement action, which could jeopardize any promised future rewards. – Kevin Jan 15 at 22:36
  • 1
    This is a startup. Startups usually fail. No agreement to be paid later is worth anything if the money just isn't there. The only way this would be worth it is as a gamble with a large upside, such as equity with provisions against dilution. – David Thornley Jan 17 at 16:39
7

Look for a better opportunity. There are plenty of companies that actually pay their employees, you should have no issue finding one.

  • Always ask questions first before blowing it off - you lose a few seconds by sending one email - yet gain a valuable chance to talk to someone - currently OP hasn't said they know for sure it's unpaid. – Mirv - Matt Jan 15 at 19:53
  • 1
    @Mirv OP asked "how would you advise me to proceed, if their offer includes asking that I work for free for a certain number of months?" Yes he doesn't know for sure but he is asking about the situation in which they ask him to work for free. – sf02 Jan 15 at 19:55
6

If they're offering you shares in the company instead of pay, they're asking you to become an investor, and pay for your investment with your scarcest resource, time. That's a Big Hairy Audacious Ask.

So, respond in kind. Ask to see their investor pitch (the same slide deck they're carrying around on the Sand Hill Road Shuffle to VCs). Ask pointed questions. For example, ask each person you interview "why is this project worth the next ten years of your life?" And ask, "what are the critical success factors for this business?" And ask to see the capitalization table (the list of shareholders) so you can evaluate whether they're offering you enough to make it worth your while.

Now, obviously Warren Buffett would be able to ask more sophisticated questions than you will. But if they're ready for Mr. Buffett's questions, they should be ready for yours.

If they get irritated at these questions, pass on the deal.

If you think the company's worth your investment, go for it. If you don't, pass on it.

If they're asking you to work without pay until an investment comes in, at which point they'll give you your back pay, they're asking you to lend them money. Same deal about asking pointed questions.

  • Who else is working without pay?
  • How many dollars in back pay do you already owe to those people?
  • Do you have a term sheet from an investor yet? If not when do you expect it?.
  • How will the investor feel about some of their investment coming off the top to pay outstanding debts to founders and employees? (Investors are sometimes reluctant to have their money go into paying off debt.)

Again, if you think it's worth it go for it. But don't hesitate to pass on the deal if you don't think it's a good risk.

Avoid signing anything (nondisclosure agreements, intellectual property agreements, etc) until you start working with them, if in fact you decide to sign on. (VCs don't sign NDAs.)

3

Treat as standard negotiation. The fact they haven't listed a salary range means they are flexible or cheap.

Seriously consider if you personally are ok with the stress they are introducing to your life. All because they didn't feel like being open with their budget. You can totally tell them over the phone interview unless they are willing to list a salary range. Everything is up for negotiation, even if you have to drive in - you can do a phone instead as it's your time being burned.

As for how to negotiation in a standard way:

I start with knowing what I need ...

  • per year to live (food/vehicle/parking/somewhere to live)
  • to have a future (a decent vacation, some mini vacations, a bit in saving)

Then go with knowing your worth ...

  • years of education
  • unique skills
  • cross interests
  • role / title pay at other companies
  • professors recommending you

Personally, I can't use negotiation tactics.

When it gets to the offer stage & they ask what I made before - I answer them with industry standards for someone with my matching experience is $X to $Y per year.

If they don't list off the salary range for me, but instead low ball me ...

I just express I expected more & wait for them to explain.

If there's enough there to live off, but it's not my price still ...

I ask them is there a way for both of us to win ...

  • Can they offer me a budget for training from outside the company sources, travel stipends, conferences which might network & bring them more business.
  • Are they willing to allow me work extra from home days, parking or transit accommodations?
  • A time allotment at work to do open source or pet projects so you always have interesting work?
  • What kind of perks do they normally not do, but have trivial impact on their bottom line or perhaps help them in other ways socially or by making me a better employee.

Please, please don't price your apartment where you are living now.
Price places within 30ish minutes of your home. This is one of your strongest points - you will not be paid to travel to work, but it's time they are taking from you if they lowball you & end up living 1.5 or 2 hours from work.

Lastly, good luck!

1

IMHO, without equity and at least perks and expense recovery there is NO reason to work for the start-up company.

Seeing you as free employee will diminish your value for employer all the while you will be tasked with building core structure with no rights to your work.

These types of companies ARE changing when start making money, but you may/will not be valued as resource, and new hires will go at your/higher level/salary

Your Answer

By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service, privacy policy and cookie policy, and that your continued use of the website is subject to these policies.

Not the answer you're looking for? Browse other questions tagged or ask your own question.