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Ask HN: Late cofounder

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Hey, I'm about to join a startup as a late cofounder and would appreciate any thoughts on the situation. It's a 3 years old startup with a "working" product that needs clients. They lost all the team except the CEO when they were out of money. The investors have about 3/4 of the company, and say they will put money on the company when they see paying clients. The rest 1/4 equity are going to be split to the CEO and me as tech lead. I've been working with them for a month with the promise of an ok salary when the company gets money and about 10% equity vested over 3 or 4 years. The legacy tech will need a lot of work, but that's not really a problem.

On the other hand I have an very generous salary offer as an lead dev on another startup.

The generous offer is time-limited, so I can't really wait and see how the risky startup goes. Any ideas on how to evaluate?

Any feedback is really appreciated, thank you

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Take the generous salary offer.

A startup takes years to build and from the looks of it you're jumping into an already failing mess for not much gain. 10% after another round or two of funding will turn into not much for all the effort you will put in. If you're not getting a salary "at first" on top of this then you should run even faster in the other direction. Never work for free unless it's something you have complete control over and is something you're very passionate about. This has all the red flags of a bad situation and one you will more than likely get screwed over on down the road.

If you want to found a startup I would suggest taking the lead dev job while you find something you are really passionate about to build.

Looks to me the entire deals favors the investors. They have 75% ownership (and hence full control) of a risky startup, which sort of failed in the first run - failed to take off, and people left. Now there is one committed CEO, and you are a new guy. Both key people to the success, but with only 25% stake.

CEO may have some other things at stake like relationships, and his reputation etc. But you have no such thing. So decide carefully.

You may have a strong bargaining position. But I don't see any value in bargaining hard for the unknown (i.e future value of a Startup).

Finally, you should take a decision on how much you yourself believe in this Startup. Also the trust other people CEO and the board inspire in you. Not an easy decision.

Are they going to pay you now with money (the green money that you can use in the supermarket)? Or you are going to get only equity?

I think that there are a few red flags:

* no clients after 3 years

* no initial team (can the CEO program?)

* investors have 75% of the company

Also, get everything in writing: "An oral contract isn't worth the paper it's written on."

(Actually, oral contracts are valid, but it's much more difficult deal with.)

These are exactly the red flags. Just the investors having 75% part is more than enough reason to not do it. Especially if they aren't industry experts and aren't working on it full-time with you.

Thanks for reply. They will pay when a new round is raised or a client pays on top of the equity. I see your points, the 75% on the investors is indeed bad, as well as the rest points.

My problem is that I really believe this can be a successful business and really really big.

Why are you joining as a "late co-founder"? Was the team that was lost included the first co-founder? How well do you know the CEO? Have you worked with him/her before? There are so many red flags that I'd flee the sinking ship and go with the other start-up.

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