After I graduated University 7 months ago I took up a job offer that I had been presented with working for a start-up company.
The offer had been negotiated and the plan was for me to come on board at a low salary initially, then after 12 months the salary would double when the business got going.
The salary I am on/started on is approximately minimum wage and I could easy get 2 or 3 times what I am earning now at another company. Actually it works out at roughly half of minimum wage if I were to work it out based on the number of hours I work.
The start-up company is run by a friend of mine who I have known for a few years so I trusted that this promise of an increased salary would be fulfilled and we could make it work.
When I came on board the start-up was a completely new company and no work on it had been started. I have been working flat out on it the past 7 months doing 95% of the work while the owner spent most of his time on another company of his. The owner and I are the only two people involved. The other company is complimentary to this new one and I have also been spending some of my time on that as well.
Essentially I have all the technical knowledge whereas the owner is more of a sales person. Without my input and skills the business would not be able get going and if I left it would fail completely. There is not enough money to hire someone else at the bare minimum salary I have been working for and if we weren’t mates beforehand I never would have accepted the wage going into this project.
The owner didn’t really have a good idea of how long a project like this would take so it has taken about 4 months longer than he anticipated. I also foresee it growing at a much slower rate than was suggested by the owner when we were negotiating the initial wage.
The long term plan is for me to split my time evenly between both the businesses when this start up launches. I will be doing all the technical aspects along with online sales and business development for both businesses while the owner attempts to achieve sale face to face. It is likely that I will be doing about 60% of the work on the existing company and about 75% of the work for the start-up company.
If I had known that I would be taking on this much of the work for the companies when I started I would have asked for some sort of equity compensation to make up for the low salary and significant contribution.
The start-up should be launching soon and I have come to the conclusion that I don’t want to be building up someone else’s business portfolio for years only for them to sell it when it becomes a success.
I want to ask for some sort of equity compensation or look at a way to get equity in the company in return for an investment but I am not sure how to approach it. It is unlikely that the owner will want to give up 50% of the company but ultimately I feel that’s what would be fair for my contribution. If two people are running a company and doing roughly the same amount of work then it doesn’t seem appropriate for one person to own everything while the other person gets nothing.
If ownership is not split equally then I feel I may become resentful and we will have a falling about at some point.
Any advice would be appreciated.