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I was approached by a guy recently who wanted me to be involved in his startup. He asked me to meet him, he bought me dinner, talked about funding and market potential, etc, then invited me to see the technology.

I told him my rate and he laughed and said it was more than his lead developer, but we moved along happily. At this stage, I knew he wouldn't be able to afford my rate, but I'm happy to drop a little for an interesting project.

At his invitation I came round the next week. He had some pretty interesting tech, and I went away thinking it might potentially be a thing. We agreed to discuss rates by email.

He emailed the next day offering a package that was very significantly below what I could accept. I emailed back with a counter offer. He emailed me back, angrily accusing me of wasting his time.

I'm curious if I handled this poorly. Should we have been more upfront about rates from the start? Or should I have otherwise done something different?

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    Hi @superluminary, just curious, was your rate higher than his lead developer's rate due to cost of living reasons at all? E.g., do you live in a big city, while his start-up was located in a suburban area? Or, you thought you were talented enough to justify a high-rate and valued your time outside of work, if no one were to hire you for work for a short period of time? Thanks, – User001 Apr 23 '16 at 4:18
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    @user001 - the second one, and also because I have a short queue of people asking for my time. Like many software developers I am time poor. – superluminary Apr 23 '16 at 6:24
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    So, he took you out to dinner, and then got huffy when you didn't "put out." Accepting a dinner invitation is not promising to "go to bed" with someone in either the figurative or literal sense. You did nothing wrong here. – LindaJeanne Apr 23 '16 at 18:47
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    Sounds like you handled this in a courteous and respectful manner. Your would-be-client's laughing at your proposed numbers was most likely a common tactic to put you on the edge and encourage you to stay on board but lower your expectations. APEGBC:CoEG:P5: uphold the principle of appropriate and adequate compensation for the performance of engineering and geoscience work. Good on you for sticking to your guns and not being unprofessional in your dealings. Far too many people think "an invention is worth a million bucks, and good coders are a dime a dozen". It's often the opposite. – Cloud Apr 24 '16 at 1:55
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    @RobertGrant Yep. I've probably dealt with at least two dozen cases with my business where a colleague refers a friend who has a great idea for the next facebook, or some new medical device, etc. They think their idea is pure gold, and they can throw a bunch of engineering coops at it for 1.5x minimum wage, and poof, $PROFIT$. I've slowly grown to enjoy the look on their faces when they realize the cost is closer to $500,000 than it is to $2,500. Can't stand people undervaluing an industry because they refuse to understand it. – Cloud Apr 25 '16 at 13:22
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The client acted poorly.

You did what any potential hire is expected to do. In business, taking candidates out to lunch or dinner is common, and acts as an incentive that gives the employer an opportunity to pitch the employer's idea.

It's a cost of doing business, and an investment in eventually making a good hire. The fact that the client does not appear to understand this, and is running a startup, signals that the client has not done a lot of this before.

Accepting an invitation to dinner does not obligate you to any commitment. You acted correctly by giving a counter offer. If rate was a deal-breaker for the client, then the client is remiss in not mentioning that sooner. Your goal in an interview is to put off rate/salary discussions until the last possible moment, so that you can increase your perceived worth to the client.

I agree that you dodged a bullet, and more importantly that you did not do anything wrong in this scenario.

Update based on the edit:

At this stage, I knew he wouldn't be able to afford my rate, but I'm happy to drop a little for an interesting project.

And this is exactly why you take candidates to dinner -- if they have an incentive to listen to your idea, you may be able to get talent at a discount.

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    Yep. Sounds like he ignored your first attempt to tell him your price, assumed he could get what he wanted, and then turned into a baby when he didn't get it. You can't really help that. – Andrew Whatever Apr 22 '16 at 16:35
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    It does sound like this ex-potential boss has a hard time understanding courtesy and consent. A meal to discuss the opportunity is a courtesy. You attending is not consent to the deal, especially if you have overtly established your expectations beforehand. – Luke Stevenson Apr 23 '16 at 17:52
  • I agree that you dodged a bullet, and more importantly that you did not do anything wrong in this scenario. This resumes the answer nicely. – Ouroboros May 29 '16 at 14:00
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It appears that you did everything that one would expect in your situation.

The problem is with the other party's perception of what "Dinner" entails. It appears that to him, dinner is more of an orientation than a presentation.

You had no obligation (or expectation) to provide him with a range ahead of time. Had it been a concern for him, he should have inquired himself.

It appears to me that he may have undervalued your skills as well as felt that for whatever reason, you'd leap at whatever offer he made. I've known people like that and it's not your responsibility to educate him how to present and negotiate.

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    For that matter - dinner is not a contract, and if he's tossing out dinners to pull in talent, he's either trying to manipulate guilt in order to get cheap talent, or truly clueless about how little a free meal will get him. – Zibbobz Apr 21 '16 at 19:32
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    He did provide his rate ahead of time, but he added this info after you answered. – Aaron Hall Apr 21 '16 at 20:01
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    Startup... that explains half the behavior. – cst1992 Apr 22 '16 at 10:35
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    @Zibbobz: I've had women friends tell me that some men always expect to get what they want after a single dinner. – dotancohen Apr 25 '16 at 14:07
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He wasted as much of your time as you did of his. Call it break-even.

His disappointment at not getting you to work below your normal billing rates is his problem.

Quote him a fair price at your rates, invite him to price-shop if he is so inclined, thank him for the opportunity to bid, and you're done until he makes an acceptable offer.

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    Probably done even if he makes an acceptable offer now :) – Hanky Panky Apr 22 '16 at 8:45
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The fact that he laughed at your initial offer was clue #1, 2, 3, 4 and 5 to make for the exit. Very unprofessional and I feel for his lead who is obviously being undervalued. I've been on a formal interview where I was interrupted by the potential employer and told "coders are a dime a dozen". I kindly stood up and walked out of the interview immediately. Mind you this was the 2nd time in a year the company pursued me. So since I was expendable before I was even hired let me relieve myself for you. You got a quick glimpse into what could of been a horrible working relationship. You did right by yourself.

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    I'd even consider doing that lead developer a favor, and drop a hint for a friendly recruiter to pick up that underpaid guy. – MSalters Apr 22 '16 at 10:28
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    @MSalters I don't think that's relevant, and it's not the OP's discretion anyway. – cst1992 Apr 22 '16 at 10:39
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    I also wonder whether the potential client is comparing hourly rates of an employee with hourly rates of a consultant/contractor. The employee still needs pay even when company income is low, and still needs benefits. The fact that a consultant with higher hourly rates can be given as little work as desired could still make them cheaper. It sounds like the client might not take all of that into consideration. – Joshua Taylor Apr 22 '16 at 21:09
  • I don't think you can assume the lead was being undervalued, they may just not have the same experience or skill as the OP. Also, as pointed out in another comment, if the OP is a contractor they will most likely charge more per hour to cover taxes and insurance (and uncertainty). Now, the employer clearly has no idea how much great talent costs, but the current lead agreed to that price. Other than that, I agree completely. – kleineg Apr 25 '16 at 17:20
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I feel the question in the title is a bit misleading -- dinner doesn't equate to hired or nearly committed or anything else. Dinner is a cultural fit interview. One that is almost explicitly going both ways (i.e. without the usual implication that the company chooses and the employee accepts whatever they decide). So, to answer that question, no, you didn't do anything wrong. He failed to offer sufficient incentives (tangible or intangible) to get you to accept, so be it.

As for the whether you did anything else wrong -- not as described. Any failed negotiation can be viewed as a waste of time, but neither people or jobs are a commodity product. You have to talk to people to find out just how they fit.

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To me this comes off more as a dinner with a potential employer and not a potential client. In such a case if that employer wants talent they are going to have to try and entice that talent as well as meet with the talent to see if they're a fit. This dinner appears to tackle both of those objectives. At the end of the day this was a meeting and informal interview, not an obligation.

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Apparently, the offer of dinner was to fatten you up for the kill. You did just fine. Maybe you should decline the dinner offers in the future to not give these kinds of people the idea the idea that you might be impressionable. At least wait until you have an established business relationship.

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    You forgot to tell him not to wear the do me pumps or that he was asking for it. – Richard Says Reinstate Monica Apr 21 '16 at 18:01
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    That's not what Amy Winehouse called them. – Amy Blankenship Apr 21 '16 at 18:11
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    Only meeting people with whom you have an established relationship is bad advice. – mart Apr 22 '16 at 6:29
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    The problem was this particular individual, not the act of going to the dinner. – user45590 Apr 22 '16 at 10:21
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I agree with the consensus here that the client acted poorly. However, one additional detail that I latched on to in your story

...involved in his startup...

It's possible this guy was offering a low number because he doesn't value your type of work, but it could also be because he doesn't have the funding to do otherwise. Of course, if he's not offering any sort of equity then it's still a shitty deal (since one day he might sell this thing and cash out for millions and you'll still have your lowballed salary).

But to echo the others no you didn't do anything wrong. Some people can't afford a pay cut or don't want to. Some people will take a pay cut in exchange for stock options or something. You don't sound like you want to either so be glad you dodged a bullet because if this is how he handles simple hiring practices then I can't imagine he'll stay in business long.

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