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The very fact that they have both COO and CEO in startup mode is a huge red flag, btw. That "reply wave" that you describe is also an enormous wtf.

Run.

The first flag was when they told me that not to worry, when we brought on a second programmer, he would report to me. Heh.

So two programmers and the company would already have 4 levels of hierarchy? No thanks.

Says something about their idea of a 'business'