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My Background

I am just finished and started looking for a (junior) developer position. I have about 2 years experience with web development (plain PHP, JS, HTML, CSS, jQuery). Of course a couple of headhunters wanted me as a client, so I let them give me offers and sometimes the offer was for a job that required way more experience. But I still gave those a shot but clarified that I am inexperienced (especially with OOP)

The Job Offer

At some point a Headhunter got me an interview with a company that produces animal food for cattle and such. It was about 4 hour drive but they offered 100% remote. It was an offer for a PHP developer. What they wanted me to do was built a web application for them, in which you basically can see the current production state. It was meant for the sellers, so they always know how much they can sell, how much is left, how long it would take for the next charge and so on.

Here is the thing though: I would be the ONLY developer, my superior would be a guy who studied computer economics and just finished like a year ago and he doesn't know anything about development. They offered an okay pay, more than the startup offered me where I learned about web development but less than most other companies. They also offered that I get like 5% or so from the app, because IF it works well, they want to sell it to others in the industry.

Question

Is it normal to offer a small percentage of profit from an app to a developer? Might this be a red flag?

Personal Opinion

I am way to inexperienced to take the job. I would be afraid that security won't suffice and it could end up in a disaster. It is also not good for me that there is NO ONE with any development experience. And they also asked for rather shady things, like telling the headhunter I wont take the job but talk to them behind the headhunters back, so they wont have to pay them. The CEO was very old-school and he told me very often that getting along on a personal level is much more important than knowledge.

But apart from this, for the future, I was wondering if this is normal or if this could be actually dangerous. I was thinking about taking this very briefly because of the share and to extend my portfolio so professionally I would look better to new employers. Disadvantage would be of course that I would just do it my way and not learn proper techniques and such.

I am really curious if in the future I should consider such an offer or not.

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  • 8
    If they're already wanting to screw the 'headhunter' out of the commission they've rightfully earned, didn't it make you wonder if they'd treat you the same at some point?
    – brhans
    Aug 30 at 13:28
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    For your own sake, don't lie for anyone. Dishonesty corrupts one's core. Integrity is more valuable in the long run.
    – David R
    Aug 30 at 14:49
  • You should ignore the shares value in compensation negotiations and concentrate on current pay. From what you describe they are for profits from the system when it will be sold to someone. As i see it its situated too far in the future to have an impact now. You can take it but not for the cost of current pay. That is if you decide to accept their offer
    – Strader
    Aug 30 at 15:16
  • If you do take it, get it in writing.
    – NDEthos
    Aug 31 at 20:04
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The profit share is unusual, but I don't see it as a problem.

Think of it like this. If the pay without the 5% bonus is decent, then the pay with the 5% can't be worse, right? Think of the pay as what you are probably going to get, and everything else is gravy.

Be careful about what the 5% is of. 5% of the app revenue? If the app really takes off then could be a significant amount of money. 5% of profit? That's not a well-defined amount and will probably end up being nothing, even if the app does well.

On the other hand, the attempt to go behind the headhunter's back is a major red flag. That's a big deceit, cheating someone who did work for them out of their pay. It probably violates their contract with the headhunter. Have nothing to do with a scheme like that, and I would probably steer clear of the company. If someone is willing to cheat a headhunter they will be willing to cheat you too.

As for whether you think you can do or want to do the job - that's entirely up to you.

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    I read it as they don't want to pay the Headhunter anything, not even the base pay. Worrying about bonuses is fine, paying the Headhunter 0 is not.
    – Benjamin
    Aug 30 at 13:40
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    I would add that you're also participating in fraud.
    – Tiger Guy
    Aug 30 at 17:46
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    The problem with profit share is that its an easy way to get ripped off. Is it 5% of the gross or net? How will you know they aren't lying about the amount? How are costs calculated? See Hollywood accounting, its really easy to lie about how much something makes. Shares/options in a public company are a different matter, the market may change but you will get your shares. In a pre-IPO company you have less protection, but there's still a fair amount of SEC regulation. There's nothing but what your lawyer can get you for profit sharing. I wouldn't trust it. Aug 30 at 20:20
  • Also, profit sharing generally only applies while you're at the company. Which makes it less valuable than an equivalent amount of shares, which are permanent ownership (although you could get diluted). I'd be very careful with this kind of an offer. Aug 30 at 20:21
  • Yeah that they wanted to talk without a headhunter threw me off big time. And that their "CTO" is someone who JUST got out of college, like me. And that they are looking for a Junior Developer. And that their pay is rather midrange/lowerrange without the shares. I was still wondering if getting shares could also be a red flag. If they wouldn't have asked for an interview without headhunter, I dont know if I could've dodged that bullet. I guess it is normal for a startup, but for a multimillion company? I dont know. Your answer gives me a good insight for the future though. Thank you
    – bibleblade
    Aug 31 at 11:46
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You’re mixing up a lot of things.

If you don’t feel like you’re ready to be a one man team, that’s fine. Some people like that some people don’t, especially early career, but that’s nothing to do with them.

Software profit sharing is not standard but is not uncommon in startups and small situations like this. It’s a variant on getting stock options and can be a better deal (shares don’t always pay off, on average they end up worthless). It’s only a red flag when it’s offered instead of pay, which it was not in this case. You’d want clarity on how it’s going to get measured in writing.

The only red flag here is them trying to rip off the recruiter. A 25% cut of a year of salary is a big hit for a small company but then they shouldn’t have gone with a recruiter in the first place. If they’ll rip him off then the chance you’ll get your fair profit sharing checks is questionable.

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  • One point regarding the last statement, As a developer, especially sole developer on a web based project, you can ALWAYS make sure you will get paid your negotiated fair share. But its situated in the future, far future , when your project will go from local to global. What i see as an issue its your lack of confidence regarding ability to execute it
    – Strader
    Aug 30 at 14:54
  • Except they arent small. They are a big player in cattle food and have about 9 or so factories. And it probably didnt come across but I was specifically looking for a junior job, as I just finished. IMO I need a senior developer that guides me and I can ask for help. Especially when it is about something as big as an App that needs to be secure.
    – bibleblade
    Aug 31 at 11:39
  • If it’s not a job you want don’t take it, you don’t have to invent more things “wrong with it.”
    – mxyzplk
    Aug 31 at 12:26
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Anything abnormal is a red flag. Not necessarily a show stopper but it should always make you pause and look at the bigger picture.

5% is normal when trying to talk someone inexperienced into something. But 5% of pie in the sky is nothing, and if it does become profitable 5% is just slightly more than nothing. In this case it's very unlikely they would sell it to their competition, and even more unlikely that their competition would purchase it from them. Inventory and tracking software can be had for free.

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It sounds like you are offered a Startup job. It is normal for these to be different.

That being said: Try to be cofounder, instead of an employee. Bargain for owning a part of the company, or at least more % of the app.

In total, do a honest analysis of how much you could earn, and at how much you value whatever % you get. Most startups fail. So if you have a 1% chance of getting 5% of 100k €, that's bad. If you think the company could sell for 10€, it's now up to you to estimate the gamble. Note: The 1% is a made up number to illustrate the principle ;)

The Headhunter thing is a red flag: They have a contract, if you sign they would benefit from it and would need to pay. But they want to lie and ask you to lie for them! Are you sure you won't be screwed sometime down the line? I wouldn't work for somebody who shows questionable ethics before I even sign. But I would be grateful for dodging the bullet, usually questionable ethis are way harder to spot.

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  • Cant be a cofounder, as this company has been around for about 20 years and they generate millions in cattle food. They are just new on the App market. Thing is I am not so confident that a) there isnt already something on the market with the functionality and b) that they will even sell it outside of their own company.
    – bibleblade
    Aug 31 at 11:41

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