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I was interviewed by a company which is a startup by a team and consists of a developer, a marketing person, an accountant and a coordinator. The team is working on the first application ever. Basically, one of them had an idea and shared it with friends and now they got some funds and want to build it.

Verbally, they stated an x salary (almost half the market salary), no benefits and that I would get 5% of whatever the company will make. And that they are promised to get more money soon by their sponsors.

I said let's move forward, but then I received an offer letter for only three months, at-will (any party can terminate at anytime), the x salary, no benefits and no 5%. They said it is three months only because they are "restructuring" the company from a LLC to a Corporate, and after that they will modify the contract and negotiate a new salary, new benefits, new everything (the 5%) and continue.

I am afraid that I will build the application for them and then, boom, get laid off. I want the job since it is 5 minutes away from where I live + I am jobless + liked the team.

They said that they will modify anything in the contract that does not make me feel comfortable. How can I secure this job, the way that makes me comfortable but without risking losing it?

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    One of them had an idea, and they now have a marketing person, an accoutant and a coordinator? One person should be able to manage all that for a company which has yet to build its first product. What exactly to these people do now? This sounds fishy to me, walk away.
    – Masked Man
    Apr 2, 2017 at 1:46
  • @MaskedMan I have got no idea. The developer is developing it, someone is advertising it on social media, one is managing and one is assisting I guess.
    – Sandra K
    Apr 2, 2017 at 3:29
  • And a random downvote passes by ..
    – Sandra K
    Apr 2, 2017 at 3:29
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    My point is two of those are unwanted. A company yet to build its first product has no need for a full-time social media manager, a manager and an assistant. In other words, at least two of those guys are just in there because they are "friends" of the idea guy, not because they are actually needed. Your time working with such clueless people is time well wasted. I leave it to you if you still want to fall heels over head in love with this job, what you decide doesn't really affect me in any way. (btw, I did not downvote. I know you didn't imply that, just wanted to be clear.)
    – Masked Man
    Apr 2, 2017 at 4:58
  • @MaskedMan I will just do it for the money + experience then but keep looking. Thanks
    – Sandra K
    Apr 2, 2017 at 5:13

3 Answers 3

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When you join a startup instead of an established company, the offer is usually a lower salary in exchange for some portion of the profits. Often the profits don't materialise. Sometimes the profits materialise, and the company will try anything it can do to avoid paying out. This company made a good start of it.

If you consider the benefits (5 minutes from home + you'll have a job + you like the team), you should assume that you will not get any profit share with your first contract, so you need to decide what percentage of the market rate you find acceptable. Someone with more US experience should add how much "no benefits" is worth.

Since there is no profit share, they should not pay anything below market rate. Your decision how much having a job close by is worth to you. Be prepared to walk away if you don't get a reasonable offer, and if you accept below market rate then look for a better offer as soon as you start. (That is not a detail that I would share with them. )

The salary should be high enough so if your worst case scenario happens (you write the software + get fired) you wouldn't have any regrets. BTW. If they don't have much money, that is NOT YOUR PROBLEM.

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  • Hi, I think you make sense. What about take it as is but keep looking somewhere else? But should I be clear with them about any detail?
    – Sandra K
    Apr 1, 2017 at 21:43
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    "no benefits" could be very, very expensive if it means no medical insurance.
    – Patricia Shanahan
    Apr 1, 2017 at 21:43
  • @PatriciaShanahan the CEO literally stated that she will give me private health insurance if I want to.
    – Sandra K
    Apr 1, 2017 at 21:51
  • So the question now is, what changes should I request and how to request that?
    – Sandra K
    Apr 1, 2017 at 21:51
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    @SandraK I would go for medical insurance and, as the answer recommends, a high enough salary that you will be content even if that is all you get. Ask by pointing out that you are not, in the initial period, getting any share of the profits, so the salary has to be considered your entire compensation. You can offer to renegotiate when they can offer profit sharing, so they will only be agreeing to the higher salary for the initial period.
    – Patricia Shanahan
    Apr 1, 2017 at 22:01
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If I was you I would turn down the offer on those terms and express interest in doing it as a consultant. With consultant recompense. This would make it worth the effort. As it stands you have no guarantee of anything. This is what consultants deal with all the time, and that's why they charge more.

Startups working on third party funding and already top heavy usually chew through techs and eat the funding.

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  • Hi, I would not turn it down, as I think that that offer is still better than staying without a job. But what do you mean by "chew through techs"?
    – Sandra K
    Apr 1, 2017 at 21:43
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    Top heavy: Developers are outnumbered 1:3. There are companies that eat up investors' money because that's the actual purpose of the game, and eat up the developers because they think developers are worthless.
    – gnasher729
    Apr 1, 2017 at 21:50
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    Startups who's primary focus is sales before they even have a product are usually going to eat the funding, they devalue the techs, and blame them when things go wrong... seen it time and time again... techs are just there to make it look good for the next round of funding.
    – Kilisi ♦
    Apr 1, 2017 at 21:54
  • I see. Thanks for the info kilsi and cc: @gnasher729. So, what path should I take now that you recommend, after reading the other answer + comments on it?
    – Sandra K
    Apr 1, 2017 at 21:57
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    I've already outlined my solution. I do it this way because it means you're in charge rather than being dictated to. The other answer is an alternative that may work, but I have no experience with that sort of negotiation, I keep things simple with a clear end goal. Getting complicated with marketing people is never a good idea IMO. So I would only take it on as a consultant until they have a permanent contract to offer me. No interim mickey mouse 3 month contract.
    – Kilisi ♦
    Apr 1, 2017 at 22:02
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They said that they will modify anything in the contract that does not make me feel comfortable. How can I secure this job, the way that makes me comfortable but without risking losing it?

They said that they will modify anything in the contract that does not make me feel comfortable. How can I secure this job, the way that makes me comfortable but without risking losing it?

Go with what you know in your heart is right. But you must be ready to risk losing it if things aren't right.

If you sense that they are liars and are attempting to take advantage, then just walk away.

If you sense that they are just negotiating hard, then refuse this offer and offer back with whatever makes you comfortable (perhaps to the original offer that excited you). Be prepared to walk away if you don't get what you want in writing.

Startups by nature are risky. This one sounds riskier than most. Only you can decide if it's worth the risk or not.

Remember - if you could get this job you could get another.

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