I've recently taken an internship in a start-up as a software developer, and, although I'm being paid 500€/mo with a 6-months contract, my CEO (let's call him Bob) has offered me a small stake (2,500€/2.5%) in the start-up, his reasoning being that my presence as a shareholder will benefit the company long-term. Since I can't pay for the shares myself, he's offered to pay for me, and I would repay him when I can.
A few considerations:
- We don't have any written contract about this loan, everything is verbal
- As you can deduce from the numbers, the start-up has raised 100,000€ of seed capital
- The stake might sound small, but the company is structured in a way to enforce a 5% maximum stake per shareholder, so it's not actually that small
- All of the shareholders so far are friends and acquaintances of Bob (they seem like they know what they're doing, but given the small required initial investment and the fact they are not from "outside" I have my reservations)
- The company can function even without my help, as it's non-tech, but the software I'm working on would definitely give it an edge
- It would be very hard for me to turn down this offer now, as I already said yes and he already wired the money, but I haven't signed anything yet
- In all honesty, I'm very excited about the opportunity to be a shareholder ina small-medium sized company, but I want to make sure I'm not being too naive
If you want more backstory about Bob and my experience working as an intern for the start-up, you can read this.
Do you think is wise to accept this offer?
EDIT: I forgot to include a (probably) important detail: the startup hasn't been formed yet, but the constitution is set to be next week.