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In my opinion, retaining equity, this early in the process, does seem unfair. By far most of the value of the company is yet to be created and if you choose to not be a part of that, it's hard to see why you would have a stake in it at all.

Leaving you 'empty handed', or only paying you the share of the incorporation fee also sounds unreasonable - you did invest time and effort and that largely remains unvalued in that case.

In the past I have dealt with similar situations by agreeing on the amount of hours and effort spend, and attach a market value to that. The leaving party then is paid that amount (either in whole, or stretched out over a period) and no equity is retained.




Hi, thanks a lot. The thing is that if I were to put a price on my work for on $10/hour, my compensation could reach $10.000, maybe even more and the co-founder would never pay me anything close to that. I actually don't see him paying me even $1000.

The thing is that I think it's pretty possible that he will sell the startup in the coming months - the startup itself may not be worth much right now, but since our programmers took far less than they should have, the source code has some value.


Are you more interested in eventually getting compensated for your time or having a piece of a potential larger valuation? Which do you think Jim is more interested in?

If you are primary looking to for the former, you could propose a deal where you get 40% up to whatever you both agree would be a market wage for the effort you put into the startup ($10/hr seems low, but I know nothing of your local economy). That may be more acceptable to Jim, and it keeps you from feeling like you got a raw deal if he has a great exit in a few months.


I don't think he has the money to pay me the real value (maybe he has, but in that case he'd never agree to pay me that. even the sum like $2000 would be a problem) so I'd prefer to split it - I'll retain a small equity stake along with some money. That's the thing I've told Jim I'm flexible in & willing to accommodate, but Jim simply doesn't think so


In that case (and this might be unpacking something else), can you just hang in for a few months?


Well, the main reason for selling the startup/source code would be my departure so I don't think that would work


> if I were to put a price on my work for on $10/hour

That's an absurd valuation and what he is willing to pay is irrelevant. Your time for this level and value of investment as a cofounder is worth more like $250/hr. Plus the fact you've been going without salary or compensation for 2 years gives this a risk multiplier. People routinely pay business consultants, legal experts, and other such professional help $300-$500 an hour outright. When the expert accepts equity in lieu of pay, the expected payout to account for risk is much higher. That's why angel investors might spend $10,000 on something and invest 100 hours, and end up with a $100 million return. So their time was worth $1 million per hour.


When you found a startup the value of your work is the value of what you create. Pinning some prevailing market value for high priced consultants or FAANG engineers in a sellers market is also absurd.

At this point it’s hard to argue for any cash value, but he definitely earned some equity.


Right, thanks!


Thank you. I'm not sure that work is worth as much as you've suggested as dasil mentioned, but I understand your point - I was going with a lower value because I'm not sure whether Jim has the money/would be willing to pay me the real value


The startup is in Europe, which could be anywhere from Switzerland to Moldova.

$10/hr is reasonable for a normal full time developer job somewhere in between.


> "$10/hr is reasonable for a normal full time developer job" — Symbiote

No.

That is false.

That is false and also a bald faced lie by a bald faced liar.

No full time developer jobs anywhere in the world pay that. Not even China.

In the West, McDonalds pays more, as does WalMart ($142,107 per year average for a Software Engineer).

Most people acknowledge WalMart is a shitty company with shitty pay and sensible people can do better than the miserable $71/hr they offer for software engineers.


"A mid-career Software Developer with 5-9 years of experience earns an average total compensation of RUB 1,440,000 based on 49 salaries." (Russia)

Assuming a 40 hour week, that's less than $11/hr. Belarus and Moldova are poorer countries, a figure for Moldova gives $7.

There are junior developer positions advertised in the UK paying £24,000 a year. Expect a 35 or 37 hour week and 6 weeks holiday, but it's not that much higher...


> In my opinion, retaining equity, this early in the process, does seem unfair.

True -- except that's what they agreed to, as far as I can tell...




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