

Ask HN: Reasonable equity to ask for - Kpourdeilami

Hello HN,<p>I joined a startup about 8 months ago as a software engineer. I was the only developer on the team at the time until we hired someone to help me out around 2 months ago. The founders have been working in the company for almost a year before I joined but on a separate product which didn&#x27;t generate much revenue and wasn&#x27;t a huge success.<p>I have been getting paid for the past 2 months at a small fraction of my normal salary (2k where I can easily make 8k a month) as the company got accepted to an incubator. I put in ~100 a week in the past 2 months and ~40 for the past 6 months. I didn&#x27;t sign any contracts with them though so the IP rights of the code remains with me.<p>The founders have been mainly idea people and focused on business aspect of the company. They promised me equity back when we started but we never put into writing. They each have invested 15k of their own personal money in the company though.<p>I brought up the equity and they didn&#x27;t like the idea and they said they have to analyze different things.<p>I&#x27;m wondering what is a reasonable equity demand? I&#x27;m expected to take the role of CTO in the company. I have the following options:<p>- Go without equity which is ridiculous<p>- Demand for equity and if they didn&#x27;t give it to me, I&#x27;ll quit and continue working on the project on my own. (they don&#x27;t have any access to the code and I&#x27;m not under contract; also they don&#x27;t have enough money to take legal action)<p>- Stick with whatever equity they offer although I&#x27;m not sure how much I should ask for.<p>I think anything below 25% is not reasonable.<p><i>UPDATE</i><p>- If I quit that is going to delay the launch by at least a year.<p>- There is another developer on the team (he is not receiving any equity) and I can easily convince him to quit and help me out.
======
striking
1/(number of founders) is approximately what you should get. Any lower, leave.
If you can get more, do.

Don't go without equity, and make sure you have an air-tight contract that
strictly defines how you get your salary, even if (whatever BS reason). A
startup is still a company, and if they're trying to waste your time I suggest
you leave.

Give them a short timeframe to decide. Don't negotiate on it (within reason).
Let them know you're not messing around.

If they're just "idea people" who are "just looking for someone to implement
the idea", you hold all the cards.

~~~
Kpourdeilami
they are using the grunt fund model and based on that argue they should
receive more equity based on the money/extra year they have put in. So you're
saying I should ask for 33%? I have told them if it doesn't get solved by
Friday, then I'll move on.

~~~
striking
You have a year's worth of code with you as well as another employee. It
sounds like you're pretty valuable.

------
liquidcool
If a startup is a marriage, do you really want to marry these people? Do you
see this as a quick exit (acquisition) or a longer slog?

If you want in, get a lawyer who specializes in startups (partnership
agreements). They will tell you what your rights are regarding IP (varies by
state), advise on how to negotiate for equity, and determine if your
cofounders have committed any crime. For instance, if they knowingly
misrepresented themselves to the accelerator in order to gain funding (keeping
in mind IANAL) they may have committed fraud (regardless of what they call
it).

------
jboggan
Sounds like a bad situation. What incubator invested in them when they didn't
own the IP of the tech they are building? I think you _should_ be considered a
co-founder from your own description of the work put in, but good luck
negotiating that when they are treating you like a contractor (but not paying
you like one).

~~~
Kpourdeilami
founders tricked the incubator and me that I was a co-founder

~~~
lostdog
If "tricking" is a thing your founders do regularly, then you should probably
get the hell out.

~~~
Kpourdeilami
well they call it not taking risks but I agree

------
jtfairbank
You're definitely a co-founder at this point. Equal split.

