Hot answers tagged

78

It seems unlikely that owning or not owning a few shares would make any difference in your career. I've been involved in preparing performance appraisals, and whether the employee owned shares in the company was never even mentioned. If in the US, the company may offer an Employee Stock Purchase Plan. That can be a good deal, if there is a significant ...


67

You've been had. You've been working in a highly qualified position for less than minimum wage. Cut your losses and find a decent job that pays a decent wage. If you ever consider working for a startup, you may accept a slightly below market salary for immediate equity. But not below minimum wage with no guarantees whatsoever.


46

So, should I tell my boss, even though Bill will tell him in a few days anyway? No. ...if I tell my boss, then I'm screwing Bill. Yes, you would be. If I don't tell my boss, I'm (in a very small way) screwing AppCorp. No, you wouldn't be. Because of the timing involved and the fact that there aren't any crazy, illegal or unprofessional activities ...


42

Startups offer equity because they acknowledge the risk to the employees of the company failing, so they present an 'upside' - if the company does well, everyone benefits. It takes a certain type of person to be attracted by that offer. Other people, like yourself, do the math; the company is unlikely to be that unicorn. What do you do? You reject their ...


36

20% and no less Simply put, your employer has been breaking the federal Fair Labor Standards Act, by paying you under the federal minimum wage. In California, there are also laws extending your right to overtime pay (for any hours over 40 per week), which you have not been receiving. It would be wise to look into this in more detail, and see what your ...


26

When I joined they agreed to eventually pay me equity, but asked me to prove myself first. Sorry, but you've been had. With six years of actual professional experience, they're the ones who should have proven themselves to you, not the other way around. Their argument is that none of the team members are paid. The fact is that they are already being ...


22

The answer is pretty simple: You are, for all intents and purposes, the "primary angel investor" in this venture. Communicate to them that by taking a significantly-below-market rate, you're essentially investing in the company. For the last six months, you've "invested" the equivalent of CAN$40k, which is the difference between your rate and the typical ...


22

Is Bob's behavior ethical? No. Assuming these demands weren't made retroactively, is 7.5% equity stake for Bob's skills and one time work a reasonable request? They don't seem reasonable to me. I would be very unlikely to give up 7.5% equity in my (potential) company for a couple of weeks work. But then again I probably wouldn't have had Bob do this ...


20

Leave. Get a normal job You've been willing to work for pennies and promises up to now. Of course a decent chunk of equity will seem ridiculous. We can't make a valuation of your company or read the fine print for you. (Yes, equity gets very complex). All we can see is that this company has taken advantage of you, and you've let it happen. We can also see ...


17

Titles are cheap in small companies. As "CTO", will you be leading the technical direction of the company, or just providing code maintenance? Questions to ask: Is the amount of technical support expected of you worth whatever the current value of 5% of the company? How do you define or limit the expectations as to what is "maintenance"? How would you ...


17

In no way is this a test of his dedication. The only jobs I know of that require employees to make an up-front investment into the business are network marketing companies and scams. Network marketing firms (the legit ones) are usually clear that you're building your business, using their platform and products (and you only make serious money if you're ...


17

Any ideas how should I handle this? Unless she has some sort of legal claim, essentially a contract that grants her XXXXXX, you should completely ignore this. Do not respond to her further. If she goes through the expense of obtaining legal council, then and only then, engage a lawyer on your behalf. Also, paying her when you don't have to might make ...


17

Have a talk with your partner about it and agree (in writing) how "effort" is evaluated and how earnings are related to effort. Then follow these rules. If you can't agree on this point, you'll have to part ways, better sooner than later. If the company is only two of you, and there's not many assets in the business, you'll have no problem to restart ...


15

You don't want equity. You want a fair salary. The reason is that it is very, very unlikely that your tech startup will become the next Facebook. 90% of tech startups fail. If you work for equity in such a startup, you end up with nothing. Of those which don't fail, most become "just" small businesses which end up providing their owners with profits ...


13

OK, let´s evaluate (bit cynical, worst case, but you know, they say pessimist are more successful): Offer is all-equity with a roadmap No money 1 other employee [the CEO] [...] management of the technical team What team? PMing product requirements So you´d be PM too? re-architecting the core technology stack And Architect? but the CEO has ...


12

How to politely ask to trade stock option in job offer for something else? Use this: Dear XXXXX, In lieu of Stock Options would you consider INSERT WHAT YOU WANT HERE? Sincerely, YOUR NAME HERE The crux of it is you just have to ask. You need to be polite and humble. Ideally these talks would happen while negotiating your initial ...


11

There are two aspects here Co founding Total remuneration It sounds like being up as a co founder/director is out of the question, so you need to decide if that's a deal breaker for you. Then as an entirely separate question, you need to look at the salary package as an employee. I would expect either a near-market rate salary plus small equity, or a ...


11

I can totally understand that you might be feeling that the stock grant should have been higher - but strictly speaking they did do what they said they would. You recieved double what a peer did, presumably because of your difference in tenure. Unfortunately I think this is the wrong thing to be focusing on - a company that is two to three paychecks behind ...


11

33% of a successful venture is worth a lot more than 100% of failed one. And essentially, they are offering to de-risk your venture (you still collect a salary, you don't need to pay for equipment or office space, etc.) - you get the chance at significant upside without any exposure to the downside. Don't overestimate the value of ideas, and don't ...


10

Different employers have different stances regarding personal side-projects of their employees: They encourage it, because that way employees train skills which are also beneficial in their day-job. They don't care what their employees do when off the clock, as long as they do not directly compete with them. They discourage it, because when the employees ...


10

When I joined they agreed to eventually pay me equity, but asked me to prove myself first. You should not have started working for them without having agreed both the amount of equity and when it would be paid. Because that have them free license to... In the past two months, they have had me work more about 50 hours a week, and paid me $1500 per month. ...


10

The first part of the answer to your question is that the portfolio risk working for a startup is nil -- you've paid nothing, you have nothing to lose. If your concern is that the downside risk to your portfolio will cause it to underperform, the question is "How?" Again, you paid nothing, and the only risk is not being compensated what you believe you are ...


9

"Fairness" doesn't exactly equate into this scenario. Even if you've built much of this project, and you personally enjoy working with the founders, you feel that you are worth more than what they are currently offering, and as such, you should make that clear to them. They may consider the offer you're making to be unreasonable since it's been steady pay, ...


9

There are plenty of benefits to joining a startup without equity. Rapid promotion Experience doing more things and having more responsibility and ability to set direction than you would at a larger shop Exposure to startup people, both in your company and funders, for your next startup None of these will make you a millionaire, however. If you want to "...


9

So they took an interest in you because of this project and then stipulate you need to shut the project down. It is not reasonable for a company to tell you what you can do on your spare time if it does not compete with or conflict with the company. Their fear is probably the product might be successful and you will leave to pursue it. But it is still ...


8

To dismiss the second point, it's not unusual at all to exchange time for equity--many startups do it. He doesn't have the money for the retainer, and this is a way to make progress. It's not likely to add up to much, other than a line-item on your resume--5% of a company that can't afford you? It looks good to put "CTO", but "span of control" determines how ...


8

Generally, no, equity-investors risk only the capital they contribute. If a company is liquidated or restructured, the debt-holders have first claim on assets. You, as an equity-holder, may only make claims on assets after the debt-holders are made whole. However, what I say above is a simplification and not true of all corporate structures. Some common ...


7

Approach this from a Decision Science Perspective Step one is to pretend Bob doesn't exist. Imagine all you have is the old non-ideal piece of code. Now suppose you walked into a store and could instantaneously upgrade your code to what Bob's code can do for $X. At what price point, X, would you be willing to buy that code to make a good impression at your ...


Only top voted, non community-wiki answers of a minimum length are eligible