
Ask HN: I was fired from a startup I helped found, I'm fucked - grumpymarketer
I'm in a rough spot and I'd like to ask for advice from my fellow HNers.  I was employee #1 at my startup and was fired 11 months in - 1 month from my cliff.  I'm not necessarily bummed I was let go, things changed with the company and my role so I guess I just wasn't a good fit anymore.  I get that.  I'm sad because I'm out of money and and have no stock.  I spent so much $$ commuting (SF to Palo Alto), eating out in Palo Alto, courting clients etc. I hardly have 2 months of personal runway saved up. And of course I worked my ass off.  I never even expensed any travel expenses because I figured it was best to keep the money with the company.  All the while I was getting paid a startup salary to begin with.<p>But now I don't have anything to show for it and am going broke.  They are offering me a tiny equity package which is approximately equal to 3.5 months of work but it seems like an insult.  In exchange they are asking me to sign a document which basically says I can never take any action against them, ever.  So should I ask or demand more? Do I have any other options here?  I would like to stay on good terms with the 3 founders because I really do respect them professionally but I'm not sure what to do. Another potentially interesting detail: I'm in my 20s and they are all 10-18 years older than me.<p>Onward and upward,<p>-grumpymarketer<p>[This is a throw away account obviously because I want to protect the identity of my former employer for the time being.]
======
paulsutter
Tell them you'll sign the release if they give you the first 12 months of
vesting. Firing someone at 11 months is a dick move. Remember: if you're not
willing to walk away, you're going to pay retail (ie, end up with 3.5 months).
I'll put odds at 70% that they give you 12 months and get the release they
want, and odds at 30% that they give you no months and get no release. That
puts the expected return of this approach at 8 months of vesting. In either
outcome you keep your self respect (priceless), and the expected return is
twice as good as caving.

The key to staying on good terms with them is being _respectful and polite_
while you make your case. If you remain respectful to them, they will remain
respectful to you. If you let them walk all over you, you're likely to lose
their respect and may actually end up on worse terms with them.

EDIT: Even if you end up with no agreement, your situation still has an option
value, a valuation exercise I'll leave to the reader. There's a reason they
want that release, and that reason only matters if they become a successful
company.

~~~
achompas
I really think you have it right: negotiate the release. Firing a month before
OP's first year of equity vests is an incredibly low move. It's also suggested
(and arguably correct) that OP might have legal recourse (the "option") if the
company makes it big (which is why founders want OP to sign a release).

They don't want a mess if things get big, so OP has little to lose by offering
this deal. There's a good chance the founders accept, too, since (a) they're
high on their company's prospects, given their thriftiness with equity, and
(b) negative press always sucks, and exercising the "option" would generate
negative press.

I'll disagree, though, and say OP should ask for 11 months of vesting--that's
what OP earned, after all. It'd be harder to get that extra month, given that
OP wasn't there for a full year and the founders have worked to hang onto as
much equity as possible.

EDIT: _Consult with a lawyer when attempting to negotiate._ A lawyer can help
you get through the process while avoiding any suggestion of extortion,
blackmail, etc. (which, unintended or otherwise, will torpedo you and ruin
your rep).

~~~
paulsutter
You are right - 11 months is better. It's the honorable ask.

------
nilsbunger
Unless you did something really wrong, custom would be getting your 1-year
cliff and maybe a bit more (3-6 months vesting?), plus a month of salary or so
as severance, in exchange for signing.

They're trying to get a "sweetheart deal" for themselves -they know you're not
represented, and they figure it's worth a shot. The signature is irrevocable,
so be very careful with it.

You should get an employment attorney to give you advice before you respond,
and if he recommends it, have him fire off a nastygram to the company.

Showing the company you have representation is likely to make the company sit
down seriously and give you something reasonable. No startup can afford to
spend its $$$ and attention on legal back-and-forth.

I know you said money is tight, but an employment attorney doesn't have to be
expensive. You'll get free advice in a consultation, and if you choose to
engage them, usually ~$500-1000 will buy you nastygrams to the company from
the attorney, a couple phone calls with their attorneys, and advice on a
settlement. Doty Barlow is a firm I've used for employment advice - small
group with lower rates but solid guys. (I have no personal connection or
financial incentive for an endorsement).

Good luck, it's hard to lose your "baby", and worse to be hurt like that. Just
keep the dispute private, and be a gentleman, and you'll walk away smelling
like a rose :)

~~~
n9com
Any founder worth his/her salt would have ensured that the company has full
legal insurance cover. I.E. it won't cost them money (other than a small
excess) to get lawyers involved.

~~~
ebaysucks
Could you please recommend one or a few legal insurance providers that cater
to startups in the US? Thanks.

~~~
n9com
Sorry, my startup is based in London, UK - the only insurer we found here that
was willing to provide worldwide coverage for a tech startup was Hiscox.

------
snowpolar
I am in a similar situation before (Being employee #1) and the way I'm thrown
out is just by a simple SMS telling me that I'm not needed anymore, taunting
me and locking me out of everything. I got so mad that I don't even want to
accept their money as I agreed to help them (used to be friends) for free back
then till they are profitable.

Having said that, looking back at it now, it is perhaps a good thing. I went
on to have much better success elsewhere, while they had success in their
business as well. Do I feel bitter? maybe in the past, but now I can't be
brothered. He still send emails 2-3 times a year taunting me about his success
with different email addresses which I simply send it to my spam folder.

Most importantly, what I learn is that, sometimes things just don't work out.
The reasons for falling out could be many and weird. For my case, my 2 other
founder friends are people who prefer 'Yes' men who agree with their
groupthink all the time. I'm not one of them and hence it is not surprising we
have to part (Although it turn out for the case which I'm arguing against and
got them angry, I turned out to be correct as time passed)

It is up to you if you want to chase for more compensation. You may wish to
consult a lawyer if you deem it's worth it. For me I don't want to waste
further time hence I did not.

~~~
tweiss
That sounds horrible - what kind person sends victory emails to former
employees/friends they fired? Maybe that's one of the downsides of having very
young & immature entrepreneurs running companies.

------
balloot
The question here is why are you so concerned with keeping on good terms with
the founders? This is a humongous dick move, and either they're very shady or
they are extremely angry at you. Either way I am not clear why you would work
with them again.

But as for the deal, I think it's pretty reasonable given that they are
exercising their ability to screw you over. Assuming you signed the
boilerplate options paperwork everyone uses, you signed a contract that
explicitly stated that you get nothing if you are let go before 12 months.
They gave you 3.5/11 of what you were supposed to get. That seems pretty
reasonable compared to 0, which is what you are entitled to.

Best of luck. Try not to dwell too much on this and I'm sure you'll land on
your feet. As for your employer, karma will surely bite them in the ass if
they pull stunts like this and screw over employees. Shame on them.

~~~
bmelton
I hope you'll pardon me for making assumptions about your age, but if there
were one lesson that I could teach the younger generation (or even just my own
child), it would be 'assume good faith'.

Because they want somebody out of the company doesn't have to mean that
they're shady, or that they're angry. I can think of dozens of reasons why you
might want to get rid of someone that wouldn't have any bearing on them
personally.

~~~
ahoyhere
If there's one lesson that I could teach the younger generation, it's that you
ought to trust what a person shows you & tells you about their honor and the
value they place on their word. When a person shows you who they truly are by
acting like this, don't make excuses for them, don't rationalize it, don't
give them a third or fourth chance, and certainly don't "assume good faith."

Assuming the best when a person shows you the worst makes you a rube, begging
to be taken.

We're not talking about a friend who lied about why he couldn't come to your
wedding or babysit your kid.

You don't get more "bad faith" than firing somebody right before you were
about to owe them a lot of money.

When a person dicks you over, the best thing to assume is that they are a
dick. This not only protects you in the future, it equips you to deal with
them in the present. If you wish and hope that underneath they really mean
well, you will only be disappointed _and_ ineffective.

If they were acting in good faith, they would have A: fired him sooner, or B:
given him the proportional share of what they originally agreed.

Leaving aside bankruptcy or serious, newly-come-to-light malfeasance on behalf
of the employee, the only explanation of a firing right before the cliff, AND
a disproportionally low offer (just over 25%!), is bad faith.

Even if they decided he's a terrible fit and they hate him, it's their
responsibility for not taking action sooner. They need to fulfill their side
of the agreement. Otherwise they are bad actors, acting in bad faith. It's
just that simple.

NB: when we fired 2 employees who were not working out at all, I paid them
both severance, _even though I had zero obligation to do so_. Why? Because I
believe in acting in good faith. Yes, it hurt my business, but it was the
right thing to do.

------
guelo
Equity isn't really worth anything for an early stage startup, it's a lottery
ticket that probably won't pay, take what they give you and move on. You're
actually lucky that they're giving you straight equity and not options that
you have to come out of pocket to convert.

So you have two months to find a job, no biggie if you're any good and have
startup experience in the SF market. Actually even if you aren't that good you
should be OK. One advantage to keeping things friendly with your ex-bosses is
that you can use them as references for your interviews. I would talk to them
and ask them if they could give you really great glowing reviews, most people
will do that for you if you keep things friendly.

Your new full time job is to find a job, it's a crappy job but at least you
can do it from home in your undies. I've been there and it's really not that
bad. One thing to remember is that you do have that two months runway, feeling
panicked you might be tempted to take the first crappy offer that comes your
way, but a job is a big portion of your life for years at a time so you should
be as choosey as you can be and try to get something that you can live with
and be happy.

~~~
ricardobeat
> You're actually lucky that they're giving you straight equity

No, he's not lucky at all. Maybe a tiny little less screwed.

------
nowarninglabel
Many lawyers will give a free consultation, have you considered consulting one
to explore your options?

~~~
jseims
My guess is a lawyer will say "yes, you could sue" but they won't do this work
on contingency.

However, if you tell your former employer that you feel 11/12 of your cliff in
equity is fair; otherwise, you'll pursue a law suit, my guess is they'll pony
up without you having to take this any further.

~~~
qq66
Is there any legal standing to sue? The 1-year cliff is very specific, and
while firing someone at 11 months just to avoid the cliff (if that's what
happened) is a complete dick move, it might be legal.

~~~
kika
Then why did they ask for release? :-)

------
tonystubblebine
I complete disagree with the people saying you should talk to a lawyer. If you
want to stay on good terms with them, anyone connected to the company, and
anyone they know, then you need to work this out at a personal level. If you
sue or even admit that you've talked to a lawyer then a lot of people are
going to be afraid to work with you.

Thankfully, it's a pretty easy conversation to have with them. Tell them that
working for them has left you in a financial straight. Then ask them if they
could include any sort of cash in their severance package.

~~~
rayiner
I disagree. As someone said above, talking to a lawyer does not mean filing a
lawsuit. No professional business person is going to hold it against you for
talking to a lawyer in a situation like this--that's what they're there for.
And frankly you'd be a chump not to explore your options, but that's almost
certainly what OP's founders are counting on.

~~~
trevelyan
I agree. The parent poster is also giving bad advice in encouraging this guy
to tell his former coworkers that he does not have the money for a
lawyer/lawsuit.

I'm not a lawyer, but a bit of searching online suggests that the behavior of
the company may be illegal in California under a law called ERISA (see the
third bullet point under "ERISA Violations" on
<http://www.lawyersandsettlements.com/case/stock_option.html>). The onus would
presumably be on the employee to establish he was fired in order to avoid
having his shares vest, but if the company had no other reason to be
dissatisfied with his performance and never communicated any concerns before
his termination he might have a case.

Personally, I think he should ask for his full year of equity and try
exchanging equity for severance if they are reluctant. The thing to remember
is that he might only have been on good terms with one of the founders, which
means there are group dynamics to how any action he takes will be interpreted
on their side. It may also only be one of the founders who cares, and the
offer may be a negotiated settlement offered from a negotiation between them
rather than any specific desire to formalize anything and avoid a lawsuit.

------
psychotik
Man, that's a tough spot to be in. Your young age helps - you can still start
from scratch and not be too much behind. I do not fully understand why you
respect your other founders if they didn't treat you right. Even if what they
did is within legal bounds, it certainly sounds like it could have been
handled better (of course, I only know your side of the story).

Outside of what others have suggested, I recommend spending a year or two
working at a larger company to build your reserves, and to build confidence
that you can go and do something like this again. You can keep exploring
opportunities on the side while building your bank account, resume and
experience.

------
mahyarm
You shouldn't of felt bad about expensing business expenses. If the company
pays for it, it's with before-tax money. If you pay for it and doesn't get
reimbursed, it's with after-tax money since your an employee. If you felt bad
about charging the company, then offer some of your own money in exchange for
equity to cover the expenses, especially when a startup is just 3 other
people. I think that way it will be still be a pre-tax expense. I'm not a
accountant so ask one. If they are not willing to do that when the company is
at that stage, then that is a big warning signal.

Since people out of the company can have their stock diluted to nothing, and
you are on bad terms with the founders, I would suggest the business expenses
you still have records for instead 3.5 months of equity.

------
Mz
A rule of thumb I use: Do you think you can get more out of them than you
could earn if you invested your time elsewhere? Do not put more time into it
than makes sense under that rubric.

I am disinclined to sue people, fight with them, etc. Go ahead and ask for
more and see what you can get. Then move on. Work on building a life for
yourself. Try to learn from your mistakes so you don't repeat them. (If you do
it right, you get to make entirely new mistakes on a regular basis.)

Best of luck.

------
waivej
I would switch to survival mode and land on your feet. It's hard to deal with
being rejected.

Take time to honestly assess if you could have done things better. Try to
resolve your emotions with the situation as quickly and cleanly as you can to
get your thinking straight and take care of your financial situation.

Dealing with lawyers seems like a distraction unless there are contracts with
your name on them or loans/financing.

------
ciscoriordan
Contact me (email in profile). We're hiring Marketers at my company, Meraki,
in SF.

~~~
grumpymarketer
Thanks Cisco I will.

~~~
ricardobeat
That was funny.

------
Simon_Templar
You have to ask yourself what is it that you brought to the table and why do
they not need it now? They are dealing from a position of strength, because of
this knowledge. you are the one that has to deal from a position of strength.
What has changed. You hae some homework to do. They want you to sign away any
future rights away. that means something is about to happen. I would not
settle for less than 7 months full salary and expenses. You have your homework
to do. Approach this as if it is a prospective client and you really want the
contract. What has changed .

Good Luck but ablove all remain calm and methodical, don't panic. Like they
said in Wall Street " never let them see you sweat "

------
djt
Everyone learns the hard way. I had a similar thing happen to me at one of my
first jobs.

Things to take away: \- first employee =/= founder. \- negotiate stock or wage
before you start. Always. \- research the founders and ask their past staff.
\- trust your gut if you think there is something fishy. \- learn from this
experience and move on.

------
SeoxyS
Walk away. Take the stock, you actually got a pretty damn good deal (assuming
you weren't ripped off on your stock package in the first place). Even 1/10 of
the stock package of a typical #1 employee is usually better than a #5
employee. Don't expect to get anything out of it.

Move on. Don't mull over it. It's actually a great time to be into startups…
there has never been such a drought of developers. Hell, maybe learn how to
code, while you're at it.

~~~
achompas
_Hell, maybe learn how to code, while you're at it._

It's not clear that OP DOESN'T know how to code.

Also, OP wasn't employee #5--he or she was employee #1, and sacrificed a year
of earnings as a result. You don't make that sacrifice, then roll over when
the founders unceremoniously let you go a month before you're due to vest. I
say fight for it.

------
xrd
What do you want to gain from this situation?

What position are you in professionally after this experience?

Meditate a lot on those two questions. Remember that there are countless
stories like yours, and this does not prove that the people in charge are
assholes, just that they are in the throes of the startup rollercoaster. They
are probably failing all over themselves, and you were an easy fall guy. It
does not excuse their behavior, but this is a very common circumstance.

If the answer to the first question is that you want to get another job
quickly, take the high ground and ask them how you can make things easier AND
how they can help you. If you did nothing unscrupulous they should be willing
to help you find another position and move on, and you should be expected to
put them in a position where they can honestly look future investors in the
eye and say we negotiated a settlement with past employees that will not screw
us and your money in the future. If you did not help them succeed at the level
they needed to (and this does not say you are a bad person, it just says you
did not succeed at the level they needed you to) then it is good that your
future has been freed up. It is honest for both parties to look at it this
way.

If the answer to the second question is that you are in a bad position after
this, then you really need to make sure you act responsibly and rationally or
you could have a very hard time the next time you interview. Saying to an
interviewer "I can't have you talk to the people I worked with the last two
years..." is a huge red flag. The best advice I ever got was when I was on the
playground and another kid punched me in the chest and the teacher had us
understand we were equally responsible. I was livid, and she was right.

Taking the high road at this point in your career is a great opportunity for
you because this situation is common and there is nothing worse than working
with someone who has a chip on their shoulder because of something like this.
If you become the type of person who can get through this and take the lessons
well, you will prove yourself as a valuable employee anywhere.

~~~
grumpymarketer
great help, thanks xrd

------
karljacob
First off sorry you are in this situation it sucks. I have mentored quite a
few people thru this situation and here are my thoughts. If you can afford it
a lawyer is a good idea. It doesn't hurt your relationship with your other
founders. They clearly consulted lawyers before letting you go which is why
they are asking you for a release. On the other hand don't just use the
lawyers to communicate with the other founders but do use them to understand
your rights and your situation. Your co-founders should respect you even more
if you stand up for what you believe in and what you are owed. It may be
painful in the short term but generally I find people respect those who stand
up for themselves. If they are asking for a release you have leverage and I
don't think it is a big stretch to ask for your 12 months. One thing to
discuss with lawyers is what were the terms of your offer letter. Was their
acceleration? Are they trying to terminate you for cause? If so this is really
hard to prove in California and its unlikely they would try to do so. Finally
on the expenses if you have the receipts submit them its another item in your
favor. In the end there is often a lot more to these stories than it seems so
I am sure there is a lot more going on, but if you keep a cool head and focus
on getting to something that is fair you can close this chapter and move on to
your next with the knowledge that you got what you deserved and learned some
valuable lessons

------
HardyLeung
Your bottomline is probably somewhere X months of equity, where 3.5 < X < 11\.
Why don't you (politely) email them that you are a reasonable person and
believe it fairness. You don't expect full cliff vesting per agreement, but a
3.5 month compensation is simply _not_ fair. Counter them something like 8
months worth of equity + expense report. Project a tone that you are
reasonable and professional about it, but out of personal principle, you will
_fight_ against unfair offers.

Give them a hint (but don't say you are talking to a lawyer) that if the
arrangement is unreasonable, you'll not just walk away. You'll spend the time
and energy to right the wrongs. Give them hints that investors, public
laundry, and/or legal means are within consideration (but don't do any of
these yet) -- even at the expense of potentially not getting anything at all.

I think if the founders are serious about continuing with the startup, they'll
think twice about this. What you are asking them is to just be reasonable, so
they shouldn't have a problem with it. They would be far more worried about
all these things you hint at (investors, public laundry, legal means).

If they counter with something -- say 6 months. Take it. Heck, if you do this
correctly, you lose no karma, not even the relationship with them.

BTW the equity... probably worthless anyway. So, the other approach is to
simply move on. I agree with others that this may actually be the better
route, but it depends on your situation.

------
btbuilder
Ask about, and submit your expense report. Never feel bad about being repaid
for money you've lent a company.

------
tylermenezes
There's a reason they want you to sign a release. You need to convince them
it's a better deal to have you sign the release and give you your 12 months of
equity, than to have you walk away without signing that release. Given that
they're early stage, and it would be pretty easy to fuck them over, it
shouldn't be hard. Posting this under a throwaway was a good move.

------
T_S_
Termination sucks but a they would never have called it a cliff unless you can
get pushed over it. Your termination agreement sounds like the typical thin
futon parked at the bottom of the cliff. If you can dig up receipts you could
ask to get your expenses paid. Suggest you sign and move on unless you have a
discrimination lawsuit in mind.

------
bkyan
Do you feel this company has a viable future? If not, I'd ask for the cash
equivalent of the equity package they offered and see what they say...

~~~
loumf
I agree with this -- get as much cash as possible, not equity. If they are not
successful, you come out ahead. If they are successful, you will probably be
so diluted, that it won't matter to you. Get your expenses and 11 x
(difference between your monthly salary and a market salary).

(I AM NOT AN ACCOUNTANT, but) If they give you equity, and the company has a
set valuation (if they took funding), then the equity has an established value
that you pay taxes on (cash out of pocket).

------
arrgeebee
1) Why did they let you go? 2) What was your role in this organisation? 3)
What does your former organisation sell? 4) Your age in this scenario is
irrelevant unless you provide more detail.

~~~
grumpymarketer
I was in charge of marketing and also did all sorts of bd under the CEO.

Something I did not mention is that the CEO was cultivating an overly
confidential culture. Over the past couple months I did not know who our
clients were, how much they were paying, status updates from our software
development. It felt like I was mindlessly rowing a canoe with blinders on and
earlplugs in. While this definitely is one management strategy, I don't agree
with it. As a result I think I got a little unplugged and they didn't like it.

I don't want to reveal what we sold yet to preserve confidentiality for them.

~~~
gyardley
Heh - if you were in charge of marketing and didn't know who your clients
were, your CEO's out of his tree and your stock's never going to be worth
anything anyway.

I'd take the 3.5 months worth of equity just in case and start looking for
another job.

(Oh, and next time do your expenses and take a sustainable salary! Early-stage
employee doesn't equal martyr.)

~~~
grumpymarketer
"Early-stage employee doesn't equal martyr" >> I think that's my biggest
lesson so far

~~~
kls
Right, and if you are going to take a significant pay cut over market, make
sure that equity vests every month. You are being compensated in equity in
these arrangements. Make sure the equity is not a future promise for
sacrifices today.

~~~
balloot
That's just not how it works. Pretty much every startup uses the 1 year cliff.
And rightly so, because for a very early employee 1/48 of the employee's
options is not a trivial amount of equity. You could hire a guy that comes in
and works for a few months and then leaves and takes .3% or whatever of the
company. That is just as bad of a screwjob as what happened to the OP, and
companies are right to protect themselves.

Anyway, the right answer here is to work for someone who doesn't pull crap
like this. And if the OP was competent at his job, I would hope the other
employees have seen what happened and are properly aware of their employer's
shady ethics. In any regard, this is just bad business and likely killed
morale to some degree.

~~~
wpietri
The deals for early employees are much more flexible than for later employees.
If he took a significantly below-market salary in exchange for equity, asking
for a shorter cliff is not unreasonable.

~~~
kls
Right, anytime I take reduced compensation my cliff becomes very short. If it
does not then it is not the deal for me. Any other arrangement leaves you in a
position to hold the bag. Now there are a multitude of way that that vesting
can be scheduled for example an introductory 3 month window where there is no
vesting and then a sliding scale where each month compounds until fully vested
at 12. I am sorry but any deal where you take reduced compensation with no
equity until 12 months is a bad deal. This post being a prime example of why.

------
huhtenberg
Try and talk to them about (back-dated) expense reports, but that's probably
it if you in fact want to keep relationships with the founders.

PS. If I read between the lines correctly, the "tiny equity package" basically
reflects their opinion of your contributions to the business, i.e. it wasn't
much. This in turn implies you were let go because of that rather because
"things changed" and you weren't a "good fit anymore". If this is close to
reality, then I can certainly appreciate the general mood you are in, but take
it as a valuable experience and learn from it. If money is an issue, just tell
them exactly that - "I'm in a crunch, please help." The chances are that they
will. I saw an absolutely abysmal programmer get hired back on a short
contract as a favor, because he would've lost his home otherwise. Just don't
lawyer up for crissake (or do it very discreetly), that's an ass move that
will _not_ make things any better.

~~~
zobzu
asking a lawyer is good to know one's options. doesn't mean you're going to
yell it at every door. you gotta know your rights. blaming people for that is
just wrong. Talking like "i spoke to my lawyer and ur in troubles!" is just as
wrong obviously.

------
smsm42
Take what they give you and move on. If you're good, you'll have a new job in
no time, everybody's hiring in the Valley now. Theoretically, it could be that
with lawyer etc. you could get more. But fresh startup probably doesn't have
much more than equity, and even that equity would not be worth anything for
years, and chances are - never. And you'll spend your energy dwelling in the
past and nurturing insults done to you. Not a good strategy for a guy in his
20s. IMHO just move on, you'll have many good opportunities. Next time you do
startup remember to be more careful and have some cushion - in this case you
got let go, but startup could also just fold through no fault of anybody.

------
dlitwak
For what it's worth, whenever our family has a conflict that's possibly legal
with someone, it is resolved pretty quickly once something is sent on my
father's legal stationary.

Lawyers scare people, can't hurt.

------
robocat
1\. If it is a lowball offer, you won't keep respect if you accept it. Nobody
respects a schmuck.

2\. As a minority shareholder, everything revolves around what they are
contented to give you. Facebook movie got something right - if majority want
to screw u they can (depending on how much effort they are willing to spend
doing so!)

3\. How can you keep a good relationship with them? - e.g. I work some hours
per week for free and keep on good terms with founders to retain my minority
shareholding.

I am an engineer type, so read above as random engineer dude advice :-)

------
dlitwak
I think it's hard for anyone to tell the reason why he was fired. But 11
months is just suspicious. They didn't realize he wasn't a good fit sooner?
Fire him sooner, or wait a month so he vests to do the right thing.

Sounds like they used a young guy to do their dirty work while they were
small, and once they got funding and didn't need someone who had rights to
such a large portion of equity in the future, brought on people who would take
less.

Pretty sketchy.

------
rpwilcox
Unless you were underage when you took the contract (or someone pointed a
literal gun to your head) you were fully capable, should have known the the
risks of the position when you started.

You took a gamble on a startup and you lost. You're not a unique or special
snowflake in this regard. Brush yourself off, maybe take a paying position to
build back your reserves, and maybe attack the next gamble with some more
wisdom.

~~~
rayiner
At least under California law, his legal rights may extend beyond just "brush
yourself off." It is incredibly shmucky for him to not find out what he is
entitled to.

------
lisper
Did they fire you for cause? If so, take the 3.5 months and run. If not, I'd
ask for the full 12 months of equity and a month's severance pay.

------
uptown
How do most startups quantify a month's worth of equity? Is there an obvious
formula based on current valuation?

~~~
daeken
Presumably it's his equity divided by 12 months times 3.5.

~~~
grumpymarketer
It is the # of shares the offered me divided by my total restricted stock
agreement. This represents the total % of equity they are granting me after
letting me go, then I multiply this by 48 (because my equity grant vests over
48 months). The results is about 3.5 months.

~~~
howmuch
How much equity (%)? Curious as I'm looking at first employee position offer
at 2.5 and nOt thrilled.

~~~
grumpymarketer
I'd prefer not to state publicly but you can email me
disgruntledmarketer@live.com (another dummy account I made).

------
dctoedt
Here are some other things to consider:

1\. EXPENSE REIMBURSEMENT LAW: You didn't say where you're located, but check
out California Labor Code section 2802, especially subdivision (c), at
<http://law.onecle.com/california/labor/2802.html>:

\--snip--

(a) An employer shall indemnify _[that is, reimburse]_ his or her employee for
all necessary expenditures or losses incurred by the employee in direct
consequence of the discharge of his or her duties, or of his or her obedience
to the directions of the employer, even though unlawful, unless the employee,
at the time of obeying the directions, believed them to be unlawful.

(b) All awards made by a court or by the Division of Labor Standards
Enforcement for reimbursement of necessary expenditures under this section
shall carry interest at the same rate as judgments in civil actions. Interest
shall accrue from the date on which the employee incurred the necessary
expenditure or loss.

(c) For purposes of this section, the term "necessary expenditures or losses"
shall include all reasonable costs, including, but not limited to, attorney's
fees incurred by the employee enforcing the rights granted by this section.

\--snip--

2\. WRITTEN AGREEMENT? You didn't say whether you had a written employment
agreement, stock-option agreement, etc. Any of those might contain a
mandatory-arbitration clause; a jury-trial waiver (probably unenforceable in
California); and/or other relevant provisions.

3\. TIME SUCK: Lawsuits and arbitrations against former employers are a _huge_
time suck for all concerned, but especially for the (former) employee. Ask
yourself whether, at this stage of your career, the upside of equity in this
particular startup justifies your making such an investment of your time.
Because no matter what happens, you'll never get that time back.

4\. SIGNAL TO FUTURE EMPLOYERS: If you file a lawsuit, future prospective
employers won't know who's right or who's wrong. All they'll know is that
you've sued a former employer. (They may well find that out when they run a
background check.) That will trigger the fear that someday you might sue
_them_. And that in turn could color their decision whether to hire you, or
instead to hire the next person, who _isn't_ suing their employer.

5\. THE REST OF THE STORY: Your former employer's founders _will_ have a
different perspective. If you sue them, there's absolutely no doubt they'll
tell their side of the story. Consider whether you want that made a matter of
public record.

6\. BRIAN REID EXAMPLE: Check out Brian Reid's story: He was fired from Google
at age 52, nine days before the IPO. His options apparently would have been
worth $10 million at the IPO; presumably they'd be worth a lot more now. His
lawsuit against Google for age discrimination has been pending for years. Dr.
Reid has a clear upside, plus what the court of appeal felt was a triable
case, i.e., a case that at least had sufficient merit that it deserved to be
decided by a jury instead of being summarily tossed out. From the facts you've
given, it's not clear that either of those things is the case for you.
[http://en.wikipedia.org/wiki/Brian_Reid_(computer_scientist)...](http://en.wikipedia.org/wiki/Brian_Reid_\(computer_scientist\)#Working_at_Google)

7\. KEEPING GOOD RELATIONS: Other commenters have made good points about the
upside of keeping a civil relationship with your former employer, in the
(perhaps-vain) hope that in the future they'll give you a decent reference or
perhaps someday even want to hire you again.

8\. USUAL DISCLAIMER: I'm not your lawyer, the above isn't legal advice
because we don't have all the facts here, etc., etc.

------
sparknlaunch12
How do you go from number one to out the door? What protection did you have in
place? Isn't your name on any paperwork?

I thought when a founder leaves you get some sort of payout for time and cash
put in?

------
j45
Don't sign anything without getting advice.

------
georgemcbay
You might as well ask for more, because why not?

But either way... 3.5 months of severance at such an early stage company is
actually pretty good. That plus your own 2 months of savings puts you in a
much better spot than you seem to think you're in.

~~~
grumpymarketer
Just to clarify...it's 3.5 months worth of equity so it's not liquid and not
worth much right now.

~~~
wglb
I would take that deal, then put it behind you and start on the next thing.
Maybe it will be worth something some day.

However, move ahead and start work on your next thing. Don't delay--it is very
easy to sit and stew.

Here is what works for me in serious times of stress.

Spend most of your energy working on your next deal.

And then, say, one hour per week, allow yourself to internally mope about
this. I am quite serious. I call it "the hour of sniveling", and when that is
done, you haven't necessarily solved a problem, but you have let those
feelings express themselves, but then move forward.

(I admit this sounds very goofy, but I use this approach to positive effect.)

~~~
pudakai
This isn't so goofy - it is like the same advice they give to people losing
weight, they are allowed to have a pig out day once in a while.

------
new_high_score
Sounds like an unfortunate story (I'm torn between recommending a lawyer or
walking away) - but the positive thing is that you're so much younger - it all
comes around, just hang in there.

------
kayman
forget it and move on. Focus on delivering value. energy you spend on dealing
with your old company is better channeled on new things.

------
wavephorm
Beware that even if you had vested stock you typically would have to buy the
options for whatever they were worth when you were hired, within 90 days. If
you're broke now, you'll need to find some place to get the money to buy those
options, which may or may not be a good investment.

------
rprasad
Get a lawyer. Immediately. That is the only advice that matters.

------
Drbble
Why is profanity in a title on the front page?

------
rainboiboi
No sh*t. You are on your way to being the next Steve Jobs.

~~~
johnx123-up
Newbie here... wants to know why the above _motivational_ comment is been
downvoted? This will help me.

~~~
rainboiboi
I have no idea too.

