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  • What is a realistic offer I can expect in this situation?

    updated 2 months, 1 week ago 0 Member · 1 Post
  • Jessica

    Member
    March 17, 2020 at 11:30 am

    Hi /r/startups, I’m posting this on behalf of my friend. He has been in talks with a startup founder over becoming a co-founder in a startup that is in the process of building a beta version of a fitness app. The founder has $40k in convertible debt from a friends and family round and is working with a developer. My friend has a graduate degree and experience managing small companies and would be helping structure the business and guide the strategic planning (amongst just about everything else, I’m sure). The founder wanted a “test period” to see if they work well together over a three-month period. At the end of this period, if both parties agree to continue to working together, the offer will be 7% equity vested over 3 years. If they do not agree, my friend will be paid for his time and the relationship will end there. His questions: What is a reasonable equity expectation for becoming a co-founder? He feels that 7% is far too low. What might be an appropriate ballpark, taking into consideration he will be working for 3 months as well? What is the ballpark range for time vested of his equity? Again, he feels like 4 year is a long time, considering the fact he won’t even be guaranteed a salary at the end of all this. Should he negotiate his future salary now, assuming that they receive VC funding? His thought is that if the equity is vested before they have funding, he would have very little negotiating power for his salary if they do receive funding. What kind of agreement might he be able to strike to this end? Should he fear being diluted by further funding rounds? Is there any reasonable way to avoid this? What other things should he know in this negotiation? Any answers to these questions would be much appreciated! – by /hq/gom101 – –

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