1

I've seen an organization that claimed to be a 'startup' and they expected their employees to work 60+ hour weeks. The salaries are pretty weak and no one has been offered equity yet. There have only been vague promises of "it will all be worth it in the end."

Isn't it usually standard for early startup employees to have some form of equity? Seems unreasonable to me for a company to ask so much from their employees without at least trying to guarantee some form of extra compensation.

Edit: To be clear...

I'm just trying to understand if there is a standard practice when it comes to equity in startups.

Either:

  1. It is normal and expected to get equity starting out
  2. It is NOT normal and expected to get equity
  3. There is no standard or expectation.

Thanks in advance.

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closed as off-topic by IDrinkandIKnowThings, Vietnhi Phuvan, Jim G., gnat, JB King Jun 30 '14 at 7:18

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  • By equity, we mean stock - correct? or is there bonus involved? – Adel Jun 30 '14 at 0:14
  • Yes I would advise anyone joining a start-up to have some equity agreement in place. That doesn't mean you get equity from day one, but there's a plan in place as to when you will receive equity. – TheMathemagician Apr 15 '16 at 8:22
6

This is a major "It Depends." A startup is a startup however its owners decide to run it.

Startups often promise equity only to the folks who were involved in the very start of the company. Later employees, who are taking less risk, may or may not be offered any equity up front and may or may not be gifted with, or be able to earn, equity as their employment with the company continues.

If you don't like what you're being offered, you shouldn't take the job. If there's something you consider essential, get it in writing or go elsewhere.

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  • 6
    Last paragraph is the key. If they're offering a subpar salary, no equity, and long hours.. move along, nothing to see here. Remembering that even if you've got equity written into your contract, you need to consider that there's a good chance it will ultimately be worthless. A vague promise is even more likely to be worthless. – Carson63000 Jun 30 '14 at 1:31
2

The hard reality is that "there are no rules." And this is doubly more for a start-up.

Generally, your own background will give you the leverage to demand equity, or overtime pay, or etc.

But by the inherent nature of a start-up(i.e high risk and no long-term guarantees), you simply work with what you have. You have to decide if you're willing to wait-it out. And management will have to decide about compensation.

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