
Ask HN: Should I continue to work for free? - 7hr0w4w4y
I&#x27;ve been helping out a startup for the last two years as CTO. I joined early on, but not as a co-founder. Most dev is outsourced - my role is to advise on what is technically possible, liaise with outsourced developers, develop BI tools, and handle the sysadmin. This means getting alerts at odd hours of the day and restarting servers etc, but my role is not full time and has been fairly ad-hoc up until now.<p>The startup has received funding totalling around $600k USD over 2 rounds. Since the 1st round of funding, the full-time two co-founders and designer have been receiving a (low) salary, but a salary nonetheless. Having recently received a second round, this is likely to increase.<p>After my first 6m, I was entitled to options and told I would be sent the details and confirmation shortly. I chased this up last week (18m later), and was told they hadn&#x27;t implemented a benefits scheme so hadn&#x27;t been formally allocated anything, but that it was being worked on.<p>After the second round of funding, I advised them that they should get a full-time CTO. The new CTO starts in 2 weeks time and is on decent money. The intention is that I stay on in an advisory role.<p>Another guy in the team in a similar position (he has done unpaid work, but invested less time than I) recently enquired as to whether in light of investment, we would receive any bonuses. The CTO answered that he would like to offer us something, that the investors may not be willing, but that we should find out in the next month or so.<p>I am still being asked to do work. Should I do it? So far, I have received no cash or shares. They have hired a well paid CTO to do my job full-time. I feel like I have been taken advantage of, but am not sure if it&#x27;s worth holding out given that I <i>may</i> receive some payment and be allocated options.<p>Seeing others being paid for their work while I am essentially working on a voluntary basis is very demotivating.<p>Advice would be appreciated!
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kdamken
WHAT THE HELL ARE YOU DOING WHY WOULD YOU EVER WORK FOR FREE AND THEN EXPECT
TO BE PAID AHHHHH.

But for real though, don't work for free, and don't work without a contract in
place unless you're doing charity work. You've been working for them forever
without them paying you. What incentive do they have to pay you now?

~~~
Freak_NL
Am I perhaps missing something in the OP question?

What motivates you to invest eighteen months of free work for a commercial
start-up? Friendship? Promises of a significant reward? Genuinely interested
in what drives you.

~~~
zapu
Maybe the job was easy enough (takes little number of hours, OP mentioned
"advising"), but is also interesting in some way and OP sees it as something
that helps them grow. The prospect of significant returns after some serious
investor comes in later - but if one was not compensated before, that is
unlikely to change even if big money comes along.

------
Spoom
They aren't going to pay you. You're probably the subject of jokes he tells
his friends.

However, if they never paid you, it means that any code you've done remains
your exclusive property (i.e. the company has no right to use it without your
approval, since there was no consideration under which a claim of work for
hire would succeed). That's your one bit of leverage here. Make the company
buy out your code. Then find a paying job that actually respects you.

~~~
SmellTheGlove
This is an interesting angle. I'd suggest talking to an attorney on this. I'm
hesitant to weigh in because I'm not that kind of lawyer (and it's the
internet, and I'm probably a dog)

~~~
jerf
DEFINITELY talk to a lawyer about this! It is a sound legal strategy to point
out to them that they have acquired no rights to your code, but there are some
pitfalls here that are best avoided by speaking to a lawyer. I suggest not
threatening them with anything at this time and also not simply yanking their
access to anything you've done, until and unless your lawyer says it is time.
Both of those things carry their own risks, and in the end you're far better
off using the legal system to redress these issues than trying technical
solutions. Plus the technical solutions all pretty much involve burning
bridges; your career is far better off if you can show your next employer that
_they_ burned the bridges, not you.

Do not be afraid to speak to the lawyer. Real employers understand that you
are not expected to work for free.

------
boyanpro
You are too kind and very naive. By what you wrote, those people are taking
advantage of you and abusing your knowledge and time. You supposed to say
something while ago. They saw that you are not making any comments and you are
not raising your voice. And then they thought, OK let's use this guy as much
as we can. If they weren't thinking like that, they would offer you a fair
compensation long time ago. If there was not enough cash, then at least in
some shares. Their plan was to use you to the point where you are not needed
anymore. And I think that is when they employed new full time CTO. I think it
is too late to do anything now. If you don't have anything on paper you will
gain nothing for you previous work.

------
nomadtech
Have you signed an IP assignment contract? Since these people appear to be
flying a bit loose, I wouldn't be surprised if the answer is no.

Offer to sign one in exchange for having the stock issue resolved.

~~~
tln
This!

It might* help you to create the contracts. Any competent company won't want
to use them but it could lower the resistance for them to agree.

*IANAL

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amyjess
Get out. Now.

Let's review:

\- If you're helping run an early-stage company but you're not drawing a
paycheck, you're a co-founder. This means you should have a significant amount
of ownership, and you should be publicly acknowledged as a co-founder
everywhere it's relevant.

\- Let's say you're an employee and not a co-founder. If the official founders
are being paid and an employee isn't, the company is operating backwards.
Employees should get paid first, then founders.

\- If the company is _funded_ , then _nobody_ should be working for free.

\- It's one thing to help out a friend running a company for free. I don't
agree with it, but I can understand it. But when you have an actual _title_ ,
especially one as important as "CTO", that crosses a line from "helping a
friend out" to "employee or co-founder of the company".

------
jason_slack
You are getting taken advantage of. You, your kindness, your naivety.

Just tell them sorry you can't provide free advice/support any longer. Then
stop, cold turkey. Don't let them come back and say: "just stick with us...."
or "well can you tell us how this works" or "before you go we need..."

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helen842000
Now there is a CTO coming on board with a set salary you have a benchmark to
compare yourself against.

I would write an e-mail to say that you are wrapping things up and at the end
of this week will be done.

If they act surprised or demand you to work for the next two weeks tell them
sure but you'll be billing them at a daily rate (regardless of if work takes
place if you're a CTO, you're on call) and send over a standard contract.

They will never discuss your worth unless they are put in a difficult position
where they have to. Do not do any more work until you have a signed contract.
If they never sign it then you're done.

Don't stay on as an advisor unless it's something you really love, it will
just make you mad to have put in so much effort and never have been
compensated in return.

~~~
elcct
> Don't stay on as an advisor unless it's something you really love

Well, he shouldn't stay especially if this is something he loves.

~~~
arcanus
^ This. If you're good at something, never do it for free.

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scott00
You mention that you were "entitled" to options. Do you have any record of
this promise? Even if it's an informal email, if they promised you options or
ownership, especially a particular amount, that could be very important.

~~~
antihero
Options are total garbage anyway, go for shares or salary.

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throwaway_374
Get a lawyer and begin sending threatening letters to the full extent of the
law. They will settle.

Most here will say "learn a life lesson and move on". The point of getting
legal is investors will be very interested in why the founders have taken
advantage of you like this. Naturally the founders will want to avoid risking
the investor's cash/rep and getting them involved etc so will likely offer to
settle.

~~~
partisan
OP, this seems like sound advice if you don't want to just walk away from the
mess.

You and your fellow free-worker have already raised the issue and have not had
a satisfactory outcome. If you stop working for free, they will pull the
carrot away and you will get nothing. If you keep working for free, you will
get nothing since you already have nothing.

When you work for free, you are saying that your time and effort are worth
nothing. Your "co-founders" got the message loud and clear and are
unfortunately not "good" people so they are operating on that premise and yet
they value the time and efforts of the new CTO.

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milesf
No. Absolutely NOT! You are not helping them, they are helping themselves to
your generous demeanour at your expense. You need to learn how to negotiate
better, which is merely a learned skill, not something you are born with.

Go listen to the first 1/3rd of Roger Dawson's classic series:
[http://www.audible.com/pd/Business/The-Secrets-of-Power-
Nego...](http://www.audible.com/pd/Business/The-Secrets-of-Power-Negotiating-
Audiobook/B00NMQVS9G/)

From his material:

There are three simple rules to follow when striving for Win-Win negotiations:

• Do you narrow negotiations down to one issue? When you do, there can only be
a winner and a loser. Broaden the scope of negotiations. Take into account all
the elements and piece together those elements like a jigsaw puzzle until both
sides are satisfied and can win.

• Never assume you know what the other party wants. Get to know the person,
rather than the business or the prospective deal.

• Understand that people are different and have different perspectives on the
negotiations. Never assume that money is the bottom line.

------
k__
Working for free like this is essentially playing the lottery.

I worked for free too for a startup, for about 6 months.

They had trouble getting the right investor. Story was, they had one but then
a company said they would buy them right away, so they didn't take the
investors money. Instead they talked to new investors and told them about the
new buying offer they received to get better conditions from the investors.

Long story short, I got my money in the end, they even paid me all sick days
(I'm a contractor and in the hospital while working there) so it wasn't that
bad for me.

They hired me to work remote for them, I stayed because I wanted to add more
remote working experience to my resume.

Also, my thought if they really paid me in the end, they would see me as a
valuable and flexible partner, who they will hire again.

Anyway, now I got almost two years of remote work experience and quite good
money out of it.

But this story could also went otherwise and I would be forced to take the
next best job I find, if I ran out of money before they could pay me...

------
alain94040
A fair offer would be anywhere from:

\- 0.25% if your role was closer to a part-time adviser, following-up monthly
for a few hours to advise on technical choices

\- to 20% if you worked close to full time for about a year as CTO

Of course, since you forgot to negotiate anything ahead of time, you are
mostly out of luck, practically speaking. There are some legal avenues you
could explore, depending on whether you contributed any IP, what paperwork you
signed, etc.

It's time you stand up for yourself. By the way, for companies that are
mismanaged (and this is clearly one of them), the likelihood of success is
even lower than for your average startup, so any stock you may fight for will
probably be worthless.

In conclusion, I would at a minimum demand the standard 0.25-0.75% deal that
any formal advisor can get. And that's an absolute minimum. In exchange for no
more work from you at all.

source: founder equity calculator ([http://foundrs.com](http://foundrs.com))

------
romanovcode
> I feel like I have been taken advantage of

You were taken advantage of. And forget about it, they will pay you nothing.

Move on and accept it as a life-lesson.

------
petecooper
This might help you decide:

[http://www.shouldiworkforfree.com](http://www.shouldiworkforfree.com)

~~~
Freak_NL
I particularly like how “Is it for a legitimate business?” branches out into
several sub questions that all end with “No.”.

------
gk1
Relevant, for any contractor/consultant reading this: "Fuck you, pay me."
[https://www.youtube.com/watch?v=6h3RJhoqgK8](https://www.youtube.com/watch?v=6h3RJhoqgK8)

------
koolba
Short answer: You've been screwed over and are not going to get a dime.

Long answer: You're probably not going to get a dime. Learn from this
experience and don't get suckered into this type of situation in the future.

------
Androider
That is not a serious business, more like some fly-by-night operation. It
doesn't sound like you've signed anything? Remember that none of the code
you've written is the property of the company without an IP assignment.

While you're a fool for having worked without a contract (even just two co-
founders workers alone will sketch out an agreement on a napkin), so is anyone
who has invested into this "business" where the IP itself might be owned by
god knows who.

------
conductr
The way to proceed it to be decisive in asking for what you want in exchange
for the IP and work you've put in. Time for negotiation is over. Based on your
past conversations, ask for what you think was agreed upon or what would have
been fair at the time. If you can reference emails, texts, or other
discussions, do it. Put it in writing, send certified mail, etc. It should be
clear that 1) your work is done 2) payment or any consideration is for past
works and the company will then own it 3) put a deadline for them meet your
request. You should make it clear that you will exercise legal options. You
may even want to get a lawyer to draft this up and deliver it to them, so it's
official and carries more weight.

This is a low aggression way to get what you want. Yet somewhat official and
displays you are serious about getting compensated for the past work. Done
right, there should be no bad blood from this. If they ignore it, and you go
the legal route; the relationships/friendships will have to be sacrificed.

------
alexc05
I believe there was a lecture in startup school once that nobody is allowed to
work for free for legal reasons.
[http://www.startupschool.org/](http://www.startupschool.org/)

This is a massive paraphrase from a lecture (I think by the pair of lawyers)
and I might not be remembering it completely correctly...

But all work is assumed to be done for remuneration of some kind. So if you
don't get paid, they are exposed to lawsuits at some point in the future. You
(I assume) could come back one day and say something like "they have no
records of paying me, but a promise was made for X% of the company" and I
imagine have a case in court. (again, 100% based on vague memories from the
source which I _think_ was Startup School.

~~~
jdmichal
I think this is the same as the IP angle others have pointed out. If there was
no contract (written or verbal), then no IP transfer took place and OP still
owns all the work they did. Contracts also can't transfer value without proper
consideration. So even if there was some sort of contract, it's not valid
until OP receives compensation for the IP.

~~~
alexc05
Thanks! That's a way better description of my version.

------
Humdeee
> ... the investors may not be willing ...

Perfect. You now have no reason to do an extra minute of output. Let the
founders and other C level exec's beg the investors for your help.

------
jcahill84
Never work for free.

The entire purpose of working is to exchange your contribution for something
of value. Whether that value is an intellectual reward, money, equity, etc. is
up to you. It seems that in the beginning you valued the intellectual reward
the project gave you, but that is now dwindling.

I would have a frank conversation about your compensation and IP, and be
prepared to move on. Don't let your emotions get the best of you, this is
business.

------
spcelzrd
Betteridge's law of headlines says no

[https://en.wikipedia.org/wiki/Betteridge's_law_of_headlines](https://en.wikipedia.org/wiki/Betteridge's_law_of_headlines)

Don't work for free. Not for a day. Not for an hour. Stop working and move on.

------
camus2
Welcome to the business world. I'll tell you something, if people see you can
work for free they'll never pay you, they will work you to the bone, and then
dump you like a piece of crap when you are useless to them. If someone
promises you something then ask him to write down that promise somewhere you
can keep. You might need it when you want to sue.

------
EGreg
Now is the time to not do any more work until you get paid. You have the
money.

Furhermore, if you have any documented promises to pay, including shares, then
you are owed a debt.

Try to engage a collection agency. They will cost you nothing and will be the
bad cop for a while even as you get to be the good cop, or at least the cop
who doesn't call them.

------
ajeet_dhaliwal
No.

Unless there's more to this. How did this situation even arise in the first
place? How do you earn a living?

~~~
7hr0w4w4y
They contacted me directly, asking if I'd help. I said yes.

I am a PhD Student with a (small) stipend.

------
maxxxxx
Unless you are willing to sue you'll never get anything. They already have put
you into the category of "useful idiot who works for free".

A little test: tell them you will work for a reasonable market rate for
consultants and see what happens.

------
pawy
No matter what you've written after this question, the answer is always no.

always.

no

ffs

no

------
mdekkers
[https://www.youtube.com/watch?v=27EukoQrVMU](https://www.youtube.com/watch?v=27EukoQrVMU)

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jmkni
You _have_ been taken advantage of!

My advice, walk away now and ignore all calls/texts/emails unless they are
contacting you to offer you equity/money!

------
segmondy
If you are smart enough to write this, you are beyond smart to know exactly
what to do? I'm curious, why you are working for free?

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apeacox
Short answer: NO. Not for free.

Long answer: sorry, you should pay for a more articulated advice. (Yes, this
is the first lesson).

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someperson_
I call troll. Also, I saw a story VERY similar to this one on Reddit two weeks
ago.

------
sharemywin
Do you have any of their promises in writing?

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gruglife
No

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bsvalley
Stop working for free now.

------
factorialboy
Do you have leverage?

------
Grangar
Didn't even read the text. No. Don't. There is never a reason to work for
free, unless it's your first internship.

