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My company (< 300) is currently offering below-market wages, no shares, no bonuses, no raises, with the constant promise of "opportunities for growth" as the company develops. Plus, we are quite top-heavy, and each time we make an acquisition we bring in a bunch of new directors. I see no future, but I have no experience and I might be wrong.

In startups, is it common to offer just a fixed salary over several years? Or is it a red flag?

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    If you're goint to take a pay reduction, you need a written commitment that they will try to make it up go you in some form. That may be a promise of a retroactive raise when some reasonable milestone us reached, stock options, or other arrangement or combination ... but there should be some recognition that you're doing them a favor by accepting delayed payment and a clear and documented statement of when and how they will reward that sacrifice. Assuming the company survives that long. Equity per se may go only to founders who spent some time working for no wages; ask your management. – keshlam Dec 20 '15 at 1:11
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    @JoeStrazzere: Happens with large companies too. One such period was responsible for the alternative expansion of IBM, I've Been Moved --- to avoid laying folks off, not only were salaries frozen but there was a lot of shuffling people to the places they were most needed. – keshlam Dec 20 '15 at 18:00
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    "Opportunities for growth" without anything to make up for it is just a B.S. excuse not to pay you what you're really worth. Stop letting them take advantage, go find a better job. – DLS3141 Dec 21 '15 at 18:12
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    @Monoandale If you had an equity stake, it may be worth riding things out. However, without one, it sounds like you're being taken advantage of. The company isn't in trouble - they're rapidly growing and taking on new people. At least start putting out feelers to see what you can get elsewhere. – Dan Lyons Dec 22 '15 at 18:47
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    Amazon makes no profit either. A company can easily make profits disappear from the books, especially if invests heavily in growth. – CodesInChaos Dec 22 '15 at 22:39
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with the constant promise of "opportunities for growth" as the company develops

Startups work on mutual trust, and you can't stall a raise for your employees with this vague promise. They have families to take care, just like yours.

Plus, we are quite top-heavy, and each time we make an acquisition we bring in a bunch of new directors. I see no future, but I have no experience and I might be wrong.

Acquisitions are made when you are kicking ass (yes, literally). They are for expanding or strengthening your position in the market. The acquiring company should be very confident enough, and well off for moving ahead with the deals. Here in your case, I don't think you're ready or confident enough for that.

As a failed startup founder, let me make it clear for you:

You employees are the ones who would be driving your company on their shoulders, and would also be the ones who'd be there for you when the ship drowns, but that is only when you treat them well.

No one would be convinced by the promise of "growth opportunities". They're not still out-of-college kids for that. You need to literally make them feel that there is indeed an awesome growth opportunity. And make sure, it is AWESOME, as you are fighting in a very competitive world where there are huge bucks and share options everywhere.

In startups, is it common to offer just a fixed salary over several years? Or is it a red flag?

Depends. If a startup is well-funded, then there would be hefty salaries. But, as they are rapid growth environments, I definitely see a fixed salary for several years as a red flag.

  • @JoeStrazzere I agree with you. But, I definitely don't recommend acquisitions in the OP's case. He looks pretty confused about his current situation and company. So, unless he is really confident (not the case here), or driven by the advice of a really good mentor; I don't think acquisitions make sense here :) – Dawny33 Dec 22 '15 at 14:19
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    @JoeStrazzere Whitey Bulger school of business says you acquire companies by kicking the ass of their present owners until they sign the business over to you. It's much lower risk than spending money on aquiring assets. – Myles Dec 22 '15 at 14:44
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You're asking the wrong question! It doesn't matter whether it's "common" or not. You clearly have a terrible feeling about the place and are paid "below market." So go make market somewhere, where you don't have a terrible feeling about the place.

My blunt advice: you smell a fish, so do I. Run, don't walk. I know this is terse but there really isn't a ton more to say about this. Good for them for hiring so many people for cheap. You shouldn't be one of them.

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Low pay is common enough with many startups. But everything else you mentioned is too vague to take the chance on growing with the company. In my experience when it's increasingly top heavy, it's usually a funding issue, and the top will eat the funding until it all collapses.

Nothing you have mentioned would make that job attractive to me. You're expendable from the start. Opportunities for growth is not a real promise of anything.

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The difference between a startup and a well-established company is that a well-established company is quite likely to just move on through the years, while a startup has a good chance to be either an enormous success or an enormous failure.

Nobody can reasonably expect from you to work cheaper because it is a startup. What a startup can try to find is people willing to take a gamble by getting less salary right now while getting a huge reward if the company succeeds (and no rewards if it fails). However, this cannot be based on vague promises. There must be something concrete in your employment contract that fixes what you are getting if the company succeeds. For example, you might be offered a small salary plus share options that might be worth a lot if the company succeeds (or nothing if it fails). It's a gamble, and whether it is acceptable or not is up to you, but that's a reasonable offer for a startup.

Accepting a lower salary with nothing in writing that shows you will benefit from the company's success is something you should never do. Find a company that pays better.

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this is an expression of my opinion only not to be confused for advice I think you have the wrong definition of a start up. You have around 300 employees I would say it's a mid size company. And actually I think you're company shed the start up tag long as you say for several years it's been around. And not to forget the part where there is acquisition of other company.

  • OK, so it's a mid-sized company. Are low pay, no bonuses, no salary rises, no shares normal in a mid-size company? – Monoandale Dec 20 '15 at 12:29
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    no they're not, unless you're in some godforsaken country living on the edge of starvation – Kilisi Dec 20 '15 at 14:22

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