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> If you're just doing a short term job as opposed to sticking with this company for the long term To expand, this is also being discussed. They have made over

by kohanz 11y ago

> If you're just doing a short term job as opposed to sticking with this company for the long term To expand, this is also being discussed. They have made overtures to bring me on as CTO, but we both agreed it would be best to try each other out through a consulting arrangement (as I am currently an active consultant). I understand that the considerations as a long-term early employee are much different (e.g. I should expect more equity and for it to vest gradually). So I could see me doing the consulting gig for X months and then being hired on as CTO/Engineer #1. At that point I suppose we would negotiate a new agreement. That probably complicates things, right?

SyneRyder 11y ago
I would red flag on this. They may sweet talk you with optimistic scenarios, flatter you with C level job titles... but apparently you are the entire tech team right now, and they're not prepared to even pay you market rates. Factor in the pessimistic view: if they can't afford you now, is the business growing or struggling? What if that equity is worthless, or unable to be liquidated? What happens if they decide down the track to "replace" you with someone else, will you get to keep your equity or does that evaporate? Do you really see this company as your life's work, or would you be happier consulting for different companies at increasingly higher rates and doing your own thing instead? I really hope I'm being overly pessimistic, I just feel I've heard this story before.
- gwbas1c 11y ago
  In my experience in startup culture, CTOs are in high demand. A lot of "entrepreneurs" just don't appreciate this aspect of the supply/demand in finding technical people to work with. IMO, if you haven't already, spend an unpaid day or two fleshing out the overall business from a technical perspective. Most likely, the leader will have some invalid assumptions. How does the leader react to these assumptions? Are you able to steer each other in a better direction? If you are going to do a short-term consultant role before becoming CTO; it's primarily to protect each other. If things fall apart, you walk away with cash, and it avoids equity problems for the company. (Lots of different people having tiny amounts of equity can complicate things.) Therefore, you should only get equity once you all agree that you're CTO. When you're a consultant, you should get cash. Specifically, you should agree on what your rate should be, and then what you're "I like you guys" discount is. You could even put in some kind of clause like "Your discount is good until [date]" to protect yourself in case they decide that they like your labor, but want someone else as CTO.
SandB0x 11y ago
I'm in a very similar situation in terms of discussing a short term consulting + possible CTO role. I don't know if we will proceed with it, but based on my plan my advice is: First do the consulting gig, charge a proper market rate (cash, no equity) for the work and do a great job of it. Define an visible and achievable target for this, rather than starting to implement an open-ended project that you won't finish in the time. At the end of this, if everything goes well and you like the company, negotiate terms for the full-time role. This will be the right time to do it: You will be in a strong position having demonstrated your skills up close and produced something of value to the company. You've charged a good rate for your work so if you don't agree terms you also aren't "down" financially. During your consulting period, apply for other jobs (if that's what you want instead of your current consulting work). If you have some other good offers on the table, you will be able to walk away if their terms aren't good enough and you will have a good floor for your market value.

by kohanz 11y ago

SyneRyder 11y ago

I would red flag on this. They may sweet talk you with optimistic scenarios, flatter you with C level job titles... but apparently you are the entire tech team right now, and they're not prepared to even pay you market rates. Factor in the pessimistic view: if they can't afford you now, is the business growing or struggling? What if that equity is worthless, or unable to be liquidated? What happens if they decide down the track to "replace" you with someone else, will you get to keep your equity or does that evaporate? Do you really see this company as your life's work, or would you be happier consulting for different companies at increasingly higher rates and doing your own thing instead? I really hope I'm being overly pessimistic, I just feel I've heard this story before.

gwbas1c 11y ago
In my experience in startup culture, CTOs are in high demand. A lot of "entrepreneurs" just don't appreciate this aspect of the supply/demand in finding technical people to work with. IMO, if you haven't already, spend an unpaid day or two fleshing out the overall business from a technical perspective. Most likely, the leader will have some invalid assumptions. How does the leader react to these assumptions? Are you able to steer each other in a better direction? If you are going to do a short-term consultant role before becoming CTO; it's primarily to protect each other. If things fall apart, you walk away with cash, and it avoids equity problems for the company. (Lots of different people having tiny amounts of equity can complicate things.) Therefore, you should only get equity once you all agree that you're CTO. When you're a consultant, you should get cash. Specifically, you should agree on what your rate should be, and then what you're "I like you guys" discount is. You could even put in some kind of clause like "Your discount is good until [date]" to protect yourself in case they decide that they like your labor, but want someone else as CTO.

SandB0x 11y ago

I'm in a very similar situation in terms of discussing a short term consulting + possible CTO role. I don't know if we will proceed with it, but based on my plan my advice is: First do the consulting gig, charge a proper market rate (cash, no equity) for the work and do a great job of it. Define an visible and achievable target for this, rather than starting to implement an open-ended project that you won't finish in the time. At the end of this, if everything goes well and you like the company, negotiate terms for the full-time role. This will be the right time to do it: You will be in a strong position having demonstrated your skills up close and produced something of value to the company. You've charged a good rate for your work so if you don't agree terms you also aren't "down" financially. During your consulting period, apply for other jobs (if that's what you want instead of your current consulting work). If you have some other good offers on the table, you will be able to walk away if their terms aren't good enough and you will have a good floor for your market value.