5 ms·

Ask HN: Help me chose a startup vs. contractor

I am currently a software engineering contractor - I have been offered a role with a startup and I have also been asked to renew my contract for 6 months. I am having a really hard time deciding and have listed the pros and cons of each, I know nobody can tell me what to choose but expressing my thoughts here might help me make a decision even if nobody replies. Startup pros * product idea is a very interesting one * near my house * Salary is $85k + 0.6% of company * Startup job is as CTO, I've never had any leadership jobs before * Idea seems like a good one, the founders have a lot of experience in the industry * Founders have a lot of industry knowledge Contract pros * Contractor income is $600p/d ($130k p/a) * I like the people I work with * I like being a contractor, I like the sense of freedom Startup cons * My interview had no coding * Startups are risky * Company has contracted out the prototype to a software house. I'd be working with one of their engineers during the handover period. I didn't get very good vibes from this guy, his code seems very over-engineered (for example, he spent a lot of the time they contracted him for building this big necessary python framework and convinced them it was necessary). He also seemed hard to talk to. The founders however have a very good opinion of this engineer. * Founders have no software industry experience. Contract cons * Long commute (hour drive each way) * Work not that interesting (it's OK though, building a django app) * 6 month contract will eventually run out and I'll have to find something new.

eschutte2 10y ago
The startup doesn't sound that attractive to me, but if you take it, I think you should get either a much higher salary or way more equity.
- throwawaygrrqq 10y ago
  Well something about the startup doesn't feel 'right' - but I don't know if this is because I'm somewhat risk averse.
  - tylercubell 10y ago
    Follow your gut, you won't regret it.
tedmiston 10y ago
> Work not that interesting If you think that now, I wouldn't do it. Or instead, offer to contract part-time to the startup alongside your current gig. I would also weigh where you're at in your life (do you value the extra money and the extra free time sufficiently more to be a contractor or not?). I've done seed stage, early founder style, and mid-stage startups. IMO engineering is much more fun at the former; work-life balance (what's a vacation?), and comp are much better at the latter. Different people place different amounts of value on these things though.
- throwawaygrrqq 10y ago
  Where I am at in my life is a good point - My life situation is that right now I could do with the extra money that contracting brings as I have my first child on the way. From your experience what point in life do you think it's right to join a startup? It's something I often associate with people in their 20s but I don't know if this is more the impression I get from the media.
  - tedmiston 10y ago
    Like many "big risks"* in life, I think earlier is better for most people. But I also think it's very challenging to give advice to other people about it vs understanding my own values and talking about my own experiences. Personally, I joined one right out of grad school. I also joined with the intention of being a founder myself one day, and learning things that would directly benefit that. I think this is a common rationale. While there is a bias toward twenty-somethings in startups, I wouldn't let that discourage you. I think it's just that the risk of "I might not have a job in 6 months" is more palatable when you're: young, not used to making (much) money, don't have a mortgage, or kids. I don't mention any of these things as reasons to discourage you, just to think about a hypothesis for the bias. By the way, PG wrote a nice essay on pros / cons called A Student's Guide to Startups [1], which is really practical for anyone considering founding or working for an early-stage startup. While much of it is about founding your own company, there is a ton of overlap between that and joining someone else's early stage company. *I do not consider working for a seed-stage startup as big of a risk as it's made out to be. [1]: http://paulgraham.com/mit.html http://paulgraham.com/mit.html
JamesBarney 10y ago
The equity seems way off here. You would be giving up 45k/year and for arguments sake lets say the equity vests in 2 years. That's 90k for .6% of a company. Which puts the companies valuation around $15,000,000. Seems high for company about to bring on their first technical hire(I'm assuming). And remember there are several downsides to equity like - It's highly variable. - It's a lot easier to screw you out of equity than cash. - It's a lot less liquid, you might not get any money for years.
- throwawaygrrqq 10y ago
  I hadn't really considered it like that. I also brought up the subject of dilution and they sort of skirted round the topic, so your comment regarding it being easier to screw me out of than cash may be quite a a pertinent one.
- partisan 10y ago
  They should just pin this at the top of the site.
icedchai 10y ago
Ask for 10% equity. Accept no less than 5%.
kevinsimper 10y ago
That you have to take over a prototype and that you only get 0.6% is a warning sign. You will doing a cofounders job and should get a much bigger share. Even if you negotiate a bigger share now, it would not matter as they have already shown how much they value the technical part of the company.
atsaloli 10y ago
What would be the possible ramifications for you in choosing the startup? The contract?
alexmingoia 10y ago
Ask for equity (and pay) equal to the CEO and take the startup job. Otherwise stick with contracting. Do not succumb to the startup culture of exploitation, where software engineers are given the same level of responsibility as other execs but far less compensation.
throwawaygrrqq 10y ago
UPDATE: I decided to turn down the startup and stick with the contract. The comments here really helped me make my decision so I'd like to thank everyone for the very helpful advice.

eschutte2 10y ago

The startup doesn't sound that attractive to me, but if you take it, I think you should get either a much higher salary or way more equity.

throwawaygrrqq 10y ago
Well something about the startup doesn't feel 'right' - but I don't know if this is because I'm somewhat risk averse.
- tylercubell 10y ago
  Follow your gut, you won't regret it.

tedmiston 10y ago

> Work not that interesting If you think that now, I wouldn't do it. Or instead, offer to contract part-time to the startup alongside your current gig. I would also weigh where you're at in your life (do you value the extra money and the extra free time sufficiently more to be a contractor or not?). I've done seed stage, early founder style, and mid-stage startups. IMO engineering is much more fun at the former; work-life balance (what's a vacation?), and comp are much better at the latter. Different people place different amounts of value on these things though.

throwawaygrrqq 10y ago
Where I am at in my life is a good point - My life situation is that right now I could do with the extra money that contracting brings as I have my first child on the way. From your experience what point in life do you think it's right to join a startup? It's something I often associate with people in their 20s but I don't know if this is more the impression I get from the media.
- tedmiston 10y ago
  Like many "big risks"* in life, I think earlier is better for most people. But I also think it's very challenging to give advice to other people about it vs understanding my own values and talking about my own experiences. Personally, I joined one right out of grad school. I also joined with the intention of being a founder myself one day, and learning things that would directly benefit that. I think this is a common rationale. While there is a bias toward twenty-somethings in startups, I wouldn't let that discourage you. I think it's just that the risk of "I might not have a job in 6 months" is more palatable when you're: young, not used to making (much) money, don't have a mortgage, or kids. I don't mention any of these things as reasons to discourage you, just to think about a hypothesis for the bias. By the way, PG wrote a nice essay on pros / cons called A Student's Guide to Startups [1], which is really practical for anyone considering founding or working for an early-stage startup. While much of it is about founding your own company, there is a ton of overlap between that and joining someone else's early stage company. *I do not consider working for a seed-stage startup as big of a risk as it's made out to be. [1]: http://paulgraham.com/mit.html http://paulgraham.com/mit.html

JamesBarney 10y ago

The equity seems way off here. You would be giving up 45k/year and for arguments sake lets say the equity vests in 2 years. That's 90k for .6% of a company. Which puts the companies valuation around $15,000,000. Seems high for company about to bring on their first technical hire(I'm assuming). And remember there are several downsides to equity like - It's highly variable. - It's a lot easier to screw you out of equity than cash. - It's a lot less liquid, you might not get any money for years.

throwawaygrrqq 10y ago
I hadn't really considered it like that. I also brought up the subject of dilution and they sort of skirted round the topic, so your comment regarding it being easier to screw me out of than cash may be quite a a pertinent one.
partisan 10y ago
They should just pin this at the top of the site.

icedchai 10y ago

Ask for 10% equity. Accept no less than 5%.

kevinsimper 10y ago

That you have to take over a prototype and that you only get 0.6% is a warning sign. You will doing a cofounders job and should get a much bigger share. Even if you negotiate a bigger share now, it would not matter as they have already shown how much they value the technical part of the company.

atsaloli 10y ago

What would be the possible ramifications for you in choosing the startup? The contract?

alexmingoia 10y ago

Ask for equity (and pay) equal to the CEO and take the startup job. Otherwise stick with contracting. Do not succumb to the startup culture of exploitation, where software engineers are given the same level of responsibility as other execs but far less compensation.

throwawaygrrqq 10y ago

UPDATE: I decided to turn down the startup and stick with the contract. The comments here really helped me make my decision so I'd like to thank everyone for the very helpful advice.