
So, you're gonna code the whole thing, do the servers and work for sweat equity... - ph0rque
http://whatmightymousehaslearned.blogspot.com/2008/08/so-youre-gonna-code-whole-thing-and.html
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anamax
If they don't have the money to pay you, you're not an employee, you're a
founder and you get the same deal that they get.

If they balk, suggest that they find another code monkey while you find
another biz monkey and let the market decide who ends up with the bananas.

------
MicahWedemeyer
I recently mentioned "equity" to some fellow hackers regarding a project we're
thinking of starting. They bailed, calling me "Mr. Corporate"

Still, I think the outcome proves that they're not ready or not willing to go
through the necessary steps to spin up a startup.

~~~
wheels
Just say "partial ownership" -- they may have just been objecting to the term.
If they don't care about that, then you're right, they're not right for a
startup. As just a job, it's a pretty horrible job: long hours, high stress,
low job security; you have to want to be a part of what's being created.

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quellhorst
Why are people so silly to code and do most of the work on an application in
exchange for a small equity chunk?

When starting out the business or marketing types don't bring much value
unless they actually have $ to pump into the start up.

~~~
mixmax
This is not always true. I know a serial entrepreneur who wouldn't know HTML
from e-mail but he is a great salesman. Basically he has sold the project,
signed the contract and has the money in the bank before the first line of
code is written. I would recommend any coder I know to take a 10% share in a
startup he launches in exchange for building the thing.

The key point here is that there are just as many lousy business people as
there are lousy programmers. Often programmers don't know what to look for in
a business guy, and end up with one of the lousy ones that are full of hot air
and no substance. This goes the other way as well which is why a lot of
business types end up with lousy programmers in their startup.

Being able to bridge the gap and walk both roads is worth more than gold.

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KirinDave
People need to learn what 83b elections are and how your company can offer
them. They're good for the stock issuers and the company, and they're good for
the people buying the stock.

I know it's new, but it's definitely worth investigating.

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ojbyrne
That was pretty good. But there is a problem - there are ways around a lot of
these things. For instance, board member - if everyone else (your partner(s),
VC member on the board) vote as a bloc, your vote becomes powerless. Another
example would be about access to financials - the company can just ignore your
requests, and leave you to sue (which ain't cheap).

~~~
evgen
Another minor problem with the suggestions is that the equity being asked for
is basically participating preferred. I don't think you are going to get this
from _anyone_ unless you are actually putting cold hard cash into the venture.
Founders usually don't end up with preferred stock, so I can't see an employee
getting any; if you want to prevent dilution then work to keep the burn rate
low so that you don't need to ask for as much money from investors and
endeavor to increase the valuation of the company when it becomes necessary to
seek investment.

~~~
dats
The only remarkable thing about the equity being asked for is the anti-
dilution provision. I don't think he's suggesting you ask for liquidation
preference or participating preference (which wouldn't make any sense).

Anti-dillution is there to prevent unscrupulous partners from buying tons of
equity (issuing new shares) at absurdly low prices just to dilute you.

~~~
dhimes
You should be as dilutable as your partners in a fair arrangement.

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qhoxie
This is a really great write-up. Many of us who have been in the situation of
a lacking paper trail can identify greatly with this advice.

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Alex3917
Why would you negotiate for a yearly salary increase lower than the rate of
inflation? I fail to understand this clever strategery.

~~~
dous
Unfortunately, in some locations, a yearly salary increase isn't even a given.
I'd say having something is a pretty darned good deal.

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danielrhodes
This article doesn't mention vesting at all and seems rather aggressive on the
other points.

I wouldn't hire anybody who wasn't willing to vest their stock.

~~~
gaius
So long as it's the same deal as the other founders/partners.

~~~
ryanwaggoner
Agreed...I walked away twice from a fledgling startup that wasn't willing to
offer me fair terms.

The first time, they offered equity that was barely in the single digit range
;-) Neither of the other two founders are technical people, and they can't
afford to hire someone, so I found this pretty laughable.

They came back with a much higher percentage, but they wouldn't agree to me
getting the same vesting arrangement that they were getting / would get in a
future round.

So far, they've not really gone anywhere since I walked.

