

Ask HN: Reasonable things to demand as one of the first engineers in a startup - Kpourdeilami

Hello HN,
Three months ago I decided to join a hardware startup as a software engineer to help develop their upcoming product. I&#x27;m the only software person on the team and I&#x27;m working as both a backend and a front-end developer.
It was a side project at first but it has turned into a serious and time consuming project. I wanted to know what is a reasonable demand that I should make? They clearly have no money to pay the only demand that I can make is in terms of equity rates.
I hope they are not expecting me to work for free since we have never discussed these stuff.
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hardwaresofton
I'm no expert, but:

1\. You should probably have the discussion as soon as possible.

2\. If you are the only engineer, you are their most important asset. No other
department has anything to do until you have a product (except for maybe
market research)

3\. Ideas are a dime a dozen, implementation/execution (and arguably
marketing) is where the battle is won/lost, and you are currently writing
their implementation/execution. You are very important, and your equity should
reflect that.

If there were 3 people I would expect you to get 33% or more, especially if
they don't have the skills to help/contribute.

This is not to say that you're invaluable (they could technically just get
another engineer, or try to pick it up themselves as they go), but you should
definitely not undersell yourself/settle for some absurdly low amount of
equity when you're doing the heavy lifting.

~~~
hashtag
In regards to #2, he said he's the only software engineer, not the only
engineer. It's a hardware startup so I am left to assume there are other
engineers on board. Irregardless, the comment that no other department has
anything to do until he does his part at best is a bad assumption or at worse
completely wrong.

Even in a pure software company, someone should be out there validating the
idea, building a client list, etc... In this case, it could be those and
things like prepping for a kickstarter campaign, storyboarding, and of course
the hardware development. There is always more to be done.

In regards to #3, in the example given, if OP wants to be cofounder then to
some degree this makes sense but if not, it gets a bit more tricky. My advice
to OP here is to figure out how much commitment you actually want to put in
and ask for equity split (vested among all members) accordingly.

~~~
Kpourdeilami
Thanks for the tips :) Here is the response I got after discussing it:

"We have an internal structure called the "Grunt Fund" that I would like to go
over with you guys which is equity based on time and money put into the
business. "

Is that a valid thing?

~~~
rahimnathwani
Whether or not it is a valid thing depends on the substance of the contract
(it is written down, right?) rather than the name.

You should be thinking now about how the exit scenarios might play out. How
would it affect your equity and payout? What if the company succeeds? What if
it fails or becomes a zombie? What happens if you leave after a year (whether
it's your choice or not)?

From the limited information you've provided, my guy says that all stock
granted (except in return for actual cash investments) should be subject to a
vesting schedule. You may want to search for something like 'founder stock
should be subject to vesting' and read up on vesting, cliffs etc.

