I have started an internship at a software start-up. I am paid just enough to pay my rent and food. This was made clear in the interview by the founder and CEO that "I'd like to pay you more, but can't". The reason I choose to go with them anyway was because I thought that I would get experienced more quickly.

They hinted that I will probably get an offer at the end of my internship. I would then be the second or third hired engineer. Here is what I think could happen :

  1. I get an offer at an interesting salary. Unless they closed some kind of big deal, I would tend to think that they lied to me the first time.

  2. They offer me a low salary. I would probably decline as I don't have any money in the bank right now.

  3. The logical conclusion I guess is a somewhat low salary, and some equity.

How do I ask that ? I definitely can't explain the first point like I do here. I'm not sure either that it is in the "company DNA" to do so.

Note : I saw this question but the situation is different, as the person in the question has already accepted something and wants to change the terms. On the contrary, I want to avoid that kind of situation by knowing what I can say beforehand.

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    On point 1, if you get a better salary poffer for a full-time permanent position from an internship, don't take it as they lied to you but that you have proven your worth to them. – HLGEM Mar 22 '14 at 17:33
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    And make sure $X is higher than the minimum that you're willing to work for, but within reasonable limits. It's all a part of standard salary negotiations. Worst case is that they say no. – panoptical Mar 22 '14 at 22:38
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    Listen to @HLGEM. The value of an intern or even a new hire from another similar position can actually be negative. Chances good that are you were not of great value to the company for much of your internship. That was then, this is now. – Spehro Pefhany Mar 23 '14 at 0:43
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    Thanks for all the good advice. Since I often read questions on the workplace and wonder what happened next, I thought I may just give a quick update. They asked me to stay, and the negotiations went quite well. I asked for a bit more than what I was willing to accept, they lowered it a bit. I lowered my expectations, but not quite what they offered. They gave me a week to think about it, but then accepted my offer the next day. – nha Aug 4 '14 at 11:40
  1. Don't worry about whether or not they might have lied to you. What difference would it make either way? Just focus on making sure you get the compensation that you want/deserve.

    Say something along the lines of "I appreciate the generous salary offer, but as this is a startup I think my compensation should also include some equity, and that the total amount of equity allocated should account for the time I spent working at a salary that only covered my rent and food".

    If you really want to make a strong case, go on Glassdoor and find the typical market rate for your role. Calculate the amount of salary you've effectively sacrificed by working at the lower rate, and assert that your equity allocation should be worth at least that amount.

  2. Sounds like you've already decided what to do in this scenario. Though you could always try negotiating instead of just refusing their offer immediately.

    Make a counter-offer by saying something like "I'm sorry, but I need at least $x to cover my expenses. And since this is a startup and because $x is still significantly below the market rate for a software engineer I think I should also be allocated some equity in the company as well".

    Again you can help your case by doing some research to determine what the market rate for a software engineer actually is in your area. And note that '$x' should be what you need to cover your expenses plus whatever extra you need to live relatively comfortably.

  3. Yes, this is the outcome you should expect from a startup company. It's up to you if you want to accept or shop around for a better salary (with less equity, usually in the form of options) at an established company. And remember that your equity will likely be worthless from a cashflow perspective for years, as 1) you will probably be subject to a vesting schedule and 2) you'll also probably be restricted from actually trading/selling the equity in most cases.

    Give some thought to what you're after from a corporate-culture standpoint as well. At a startup you'll have more freedom, more responsibility, and more opportunities for fast advancement if you're good enough. You also run the (very real) risk of having your equity never be worth anything. With a more established company you'll have more stability, but are also much more likely to run into a rigid corporate culture that limits your responsibilities and the speed at which you can advance.


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