Let's assume the company is just kicking off and has secured $600k - $1m of initial funding. How do you think about pay? What are good questions to ask before committing?
I'm only used to negotiating with a large corporation that is both public and willing to show actual money.
The only reasons to do it are to learn from the founders or as a way to grow with the company into a manager/director much more quickly than you could at a bigger company.
As a #3 employee, assuming #1 and #2 are founders, you are as close to founding team member as possible and you should be compensated similar to founder than a #30 employee.
Definitely say NO to 1% of common.
When you join this early, the main compensation is equity.
To give you a benchmark, most investors pressure founders to never grant more than ~1% of the company to a single employee. In this current environment though, you could probably push for ~1.5%, especially if you take the title of "founding engineer".
When it comes to salary though, you can do three things:
1. Clarify the minimum you'd "happily" take to work with them. This mainly depends on your alternatives and how much you care about this company
2. Understand how much budget they have by asking how many people they want to hire to achieve what milestone when. Note: often people don't have a plan, so you have to resort to no. 1
3. Negotiate a written agreement to raise your salary by X% when the next fundraising goes through
Finally, look for ways to enlarge the pie, such as negotiating getting a 1on1 with the founders every 2 weeks to learn about whichever topic interests you.
Did I forget anything? Happy to share more.
I just was not confident that in 5, 10 years time my shares would break even with the opportunity cost. And I’m a hardware engineer, so lower opportunity cost than most on HN. I’m not sure how the math ever works out where the startup is a good decision? I guess odds of unicorn valuations are possible for you software people, almost non existent for hardware. Do you factor in anticipated salary raises?
just lol