
Ask HN: What do you think about these offer terms? - mircea
Hello HN,<p>I've been offered the role of CTO for a stealth mode startup(internet e-commerce) in Berlin, to complete the founding team. The terms of the offer were:
  - 3.5K€ gross, t &#60; 7 mo
  - 4.5K€ gross, 6 months &#60; t &#60; 13 months
  - market value salary + 3-4% equity, t &#62; 13 months<p>During the interview, I was told that my expectations of salaries in Germany are a bit high (I'm based in Romania, currently): what would be market value for a startup CTO in Berlin? I was expecting something like 7-8K€ gross.<p>How is life in Berlin (housing, dining, culture, etc)? I don't speak german,yet :)<p>For a salary that is much lower than what I perceive  to be market value, at least I would have expected much more significant equity.<p>I have experience with US based startups having worked as a very early employee in a leadership role but don't have experience dealing with EU startups.<p>Anything you think would help me make a better decision (legal, financial, etc) is welcome.<p>Is there a website where I can calculate the net salary from gross?<p>Thank you.
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dirkdeman
I assume that market values in Germany don't differ too wildly from where I'm
based (The Netherlands). The 3500 - 4500 Euros for the first year is OK I
guess for a startup, albeit somewhat on the lower side. US salaries
(especially Silicon Valley) are higher, but so is the cost of living.

What does raise a red flag for me is what happens after a year. 'Market
value', how much is that? It seems they assume that business is going to grow
fast, but there's no sure way to tell. Remeber: they're in stealth mode so
they probably have no revenue to speak of at this point. If business isn't
going well in the future you're likely stuck with the same salary and 4% of
nothing, at best.

As for the net salary, you can use www.nettolohn.de (in German). I took the
liberty to calculate the net wage from EUR3500,-, it will be somewhere around
EUR 2100,- monthly.

Having said that, Berlin is a great city, amazing atmosphere and a nice
startup culture. If I had to choose any European city to build a startup from,
Berlin would be my first choice. With 3500 euros monthly, you should be able
to rent a decent place, buy food, go out and save for the occasional trip to
Romania.

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mircea
Thanks a lot for the info. Do you know what is typical for an EU startup in
terms of issuing stock? What types of stock are available, which type is
usually issued to the founders, investors, etc?

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dirkdeman
Sorry, I have no idea!

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brudgers
3-4% equity is not really a founder's stake.

Assuming no dilution (a huge assumption for a startup in stealth mode), it
would take a $200 million dollar exit under the US tax system (I suspect
Germany's is no more favorable) to provide Fuck You money.

In the abstract, a founder's equity stake should provide that sort of money in
the $50 million range at exit and should assume dilution unless the company is
bootstrapping and already profitable.

What you really have in front of you is an offer to be an early hire at below
market salary. There's nothing wrong with that, but see it for what it is.

Good luck.

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mircea
The 4% is in fact dilutable. That was my first question when I heard the
equity amount. Thanks.

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mircea
I'm reposting the offer terms with, hopefully, better formatting.

    
    
      - 3.5K€ gross, t < 7 mo
      - 4.5K€ gross, 6 months < t < 13 months
      - market value salary + 3-4% equity, t > 13 months

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begus
You need more than 20% equity.

