4 ms·
This is a very difficult sell at most startups, particularly those who have done A rounds, as it requires legal maneuvering in most cases. If you want startup
by patio11 11y ago
This is a very difficult sell at most startups, particularly those who have done A rounds, as it requires legal maneuvering in most cases.
If you want startup stock, I'd think "Charge biggest/most sophisticated companies a LOT of money, reinvest a portion into angel rounds." This does mean that you'll have stock from companies you didn't work for.
Note that angel investing is, for most angel investors, a fun way to lose money. (I have three small angel investments.)
An angel who invests $50k into a startup at a $5 million valuation gets a MUCH better deal than an employee who is offered 1% of the company, by the way. Ask me why if this isn't immediately obvious to you.
- anonconsulter 11y agoNot a bad idea about charging more and then just angel investing. Although then you have to be a competitive angel investor in order to get into the best deals, essentially taking on a new angel investor job in addition to consulting. Have you successfully got stock as part of your consulting compensation and if so, why do you think you succeeded even though it's a really tough sell? For the $50k angel investment, I'm guessing that you mean because its preferred stock with no vesting?
- patio11 11y agoNever asked for stock from clients; very happy with that decision. I wrote up the reasons for angel stock being better than employee stock on Twitter and, as I am on a phone right now, cannot conveniently paste it. Can someone please link that conversation here?
- tvmalsv 11y agoHere it is: https://twitter.com/patio11/status/660953729940635648 https://twitter.com/patio11/status/660953729940635648
- anonconsulter 11y agoAccording to http://www.kalzumeus.com/2015/05/01/talking-about-money/ http://www.kalzumeus.com/2015/05/01/talking-about-money/ you are asking for ~$30k/week when consulting. I just read some of your year-in-briefs, and it seems like the most you ever made consulting was $150k in 2012. Is that correct? How much income are you making per year consulting? Because I'd want to make much more than $150k in order for it to be worth it. The numbers I'm going through right now show that, even if I can make a lot of income consulting, if I just join the right startup I could earn stock options worth effectively more than I'd ever be able to make consulting (assuming I don't get stock consulting).
- shoo 11y agoperhaps that's a reasonable analysis, but you are working from the assumption that you're able to "just join the right startup". i doubt that it is realistic to think that you have much control over it turning out to be "right" or not. if you are able to earn $150k / year from consulting in a relatively small fraction of your time (incl. the overhead of networking, etc), that frees you up to use the remainder of your time on other activities, perhaps profitable or something else you value. some ideas: start your own startup, start your own small business, focus your energy on building a diversified investment portfolio, buy and renovate a house to sell, plan and run a series of workshops, start your own hobby farm, spend more time with people whose company you enjoy.
- tptacek 11y agoMost people who make more than 150k annually consulting do it by managing a team of consultants. An important reason we're always telling people to raise their rates is that --- unless your rates are way too low --- a sole practitioner can almost never extrapolate their rate to figure out what their annual take-home will be.
- JoeAltmaier 11y agoI'm not so sure. Not this guy anyway. Our partnership makes quite a bit more than that, and its just us chickens doing the work. And we stay as busy as we care to. Caveat: we each have decades of expertise in our field.
- barry-cotter 11y agoFirst example: vesting. The thing represented to the employee as "ownership" is actually "ownership contingent on you being here in 4 years"