Ask HN: is this a fair offer? | Hacker News Reader

Ask HN: is this a fair offer?

4 pointscluelessdude15 comments

I received an offer and wanted to get the general public's opinion regarding it.

Background: - Startup with 0 lines of code, 2 founders - Raised stealth funding of 1-4 million USD - Coding will start as soon as 2 devs are recruited - Founders are taking a regular salary pretty much, maybe a bit less than average (from what I gather) - The employee stock pool is 10%

Given the above, how fair is it that I was given an offer of 50% of my current pay for ~0.6-0.9% in options?

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Is your current pay average, or above average market rates?

How much did they actually raise? 1-4 million is a wide range for a 4 man operation. Even at 1M, I don't see why they would only offer 50%, specially if the founders are taking a regular salary.

My current pay is probably 10-15% above average. Funding is more to the 2-4 range. My main concern is whether the equity is within the "average" for first developer on deck in a startup with VC money

At market salaries average for a lead engineer is 0.5% to 1% at the Series A point. Half-salary would demand more equity.

http://venturehacks.com/articles/option-pool-shuffle#market

thanks for the link. that table is 4 years old, is it still the average?

You're the first developer on board. Get more equity, 2% would be good if they are giving you half-salary. 1% would be good if they are willing to do full salary.

Walking away from lowball offers makes you worth more in the long run.

I would agree with this.

But I'm assuming you're a developer and the founders aren't and if they are trying to hire you, you have a certain set of skills they want.

What role would you play? Most seed raises are in the $500k-$1m range these days in which case the first handful of employees are expected to work for about half salary, so that's not surprising. Except that you say they raised upwards of $4m in which case salaries should be closer to market (but still lower). If yours is a key role, .6% is too low. 1% or more might be right. But it depends a lot on the importance of your role (engineer vs non-engineer, role player vs manager/director). Is neither founder technical? Watch out.

50% less seems low. Everything is a negotiation. Remember this. If you think you're worth more (and you obviously are since you make 2x of that offer right now), come back with a counter offer that's 50% more than what you currently make. If they say they can't do that, then you can always counter back and push for more options in exchange for less cash.

Unless you are currently making really good money I wouldn't leave for 1/2 of what you are making and less then 1% in equity.

Going by what you've told us, I don't think "how fair is it" is the question you should be asking yourself!

out of curiosity, how were the founders able to raise at this level with no product? Did they have a pre-existing relationship with the financiers?

Good question. I am interested in hearing how they pay themselves with no product as well?

Depends, how good a programmer are you?

employee stock pool is a bit low -- should be 20% and up.

Not necessarily. Depends on hiring plans.

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