I am finishing my master studies soon and three of my friends asked me if I would be interested in working as a developer in this new startup company they are founding soon. Their idea is very interesting and I think it has great potential. I am very enthusiastic to work with them.
It will be my first job and I’ve never worked for a newly founded startup company. What are the things that I should ask them in terms of salary, contract, my share in the company, etc. and what is the best way to ask it without saying something like “So how much will you pay me?”. I understand that a startup company won’t pay much in the beginning but I believe I have the right to at least ask for a “survival salary”, right?
You do need to eat. And since it is a newly founded startup, “how will you pay me” is a perfectly legitimate question.
Really what you need to be asking is how are they funded? Is it all personal credit card debt and loans from friends and relatives? Or are they negotiating Series A financing with Sequoia Capital? Do they have a product and potential clients or will you be starting from square one? What will your role be? How much equity will you get? What is the vesting period? Do you even have a facility to work out of or is it 3 guys working in their parent’s garage?
Another thing about start ups. Expect to have little or no life. You will be expected to work long hours and weekends as if the very success of the company depends on your work. At to a large extent, it actually might, as there is no one else to do it and nothing exists in a startup until it is built.
It can be fun and interesting, but it can also be somewhat of a nightmare. It can be good experience though for a first job out of school.
Thank you for the advice. In the business plan, they call themselves the cofounders and they will recruit two developers, one of them being me. It’s a smartphone app so no need for an office. Thus, eveything will be from scratch. It will be the two of us, the developers on whom the future of the product depends on so I believe it is my right to ask for share of equity, right?
You can ask for a share of equity if you like, but realize that it’s very, very likely never to be worth anything. Most startups never amount to anything. And on the iPhone platform there are already 600,000 apps covering just about everything, so the app itself is unlikely to succeed.
I would ask for the courtesy of a 60 day notice before they run out of money. Get it in a contract if possible.
When the company goes tits up, I still get 2 months pay. Or something like that. Because a start up may sound exciting, but it is a very fragile thing to bank on.
Equity only exists when all the bills and expenses have been met, and there is more money left over. This could be never, probably will be. If the company happens to succeed at first, then they will need to re-invest what ever equity they might generate, into growing the business.
Be prepared to invest what ever assets you personally have, into the company too, as once you get in it is all or nothing, usually nothing.
You are young and in a position to take a risk, so go for it! But cover your plan B too.
Why the hell would he expect to invest all his assets?
I think a “start up company” that consists of a single mobile app concept, that you are going to have to build for them is dicey indeed. I’d be sending out my resume in the meantime.
To be honest, I dont feel very comfortable with the fact that I will build the whole product and they will be the cofounders filling their pockets. It might be a dealbraker for me. I prefer all the cofounders to be coding together to work towards the same goal, not wandering around for someone else to fill their pockets. It disturbs me that they will still be studying while I am working fulltime. Sounds like they are looking for an easy way to sponsor their studies.
Maybe but running a business, especially a startup, isn’t easy if they know anything about what they are doing. If you think you are doing all the work, you would be better off just starting a similar business on your own. More likely, you probably don’t understand that hands-on work isn’t the only or even the most important part of running a business. People often make that mistake in software development, manufacturing, and other industries where the people doing the final assembly claim they are doing ‘all’ the work while management is just kicking back and riding on their efforts. It can be partially true in some cases but usually not for long if they know what they are doing at all.
For software start ups, the developers are important but they are far being the only contributors. Good managers have to have skills in sales, fundraising, product conception and execution, customer relationship management, advertising, HR, licensing, legal contracts and much more. You as a developer just have to code based on the idea they came up with and funded. It isn’t the same scope of responsibilities. The chances are great that they won’t be able to do one or more of the things I listed well enough either and that will cause the whole business to fail like they usually do.
You need to decide for yourself how much value the others are contributing compared to yours.
If they are offering to pay you a minimal salary for a minimal share of the company, planning to send you a few emails “outlining the idea” for the app, and expecting you to take care of the rest of the implementation while they sit back and relax, forget it.
If they have genuinely novel idea that you think has a chance of succeeding, are going to provide you with a detailed specification for the application’s functionality, user interface, etc., and they have the experience/drive/ambition/resources required to make it a success in all the ways Shagnasty mentioned, it might be worth considering, especially if they are willing to give you a significant share of the company.
You probably won’t be paid much, and you won’t get any benefits. I recommend that you continue looking for work while using this job as a stepping stone. It could be a nice way to get your career started, but you won’t be able to make ends meet.
What should you ask for? A miracle from a higher power, especially when working for a start up company.
I think it depends. You need to take a good hard look at the “management team” here. Do they have any sort of track record? Or are they like the Winklevoss twins coming up with a half-baked idea they don’t have any way to actually implement?
A lot of business types have a lot of trouble converting their grandiose “strategy” into something practical. Unless these two founders have real past experience founding startups, raising capital or have real business connections that could become clients, I question what value they actually add.