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Best advice would be: don't do this yourself. Hire a lawyer, have them redline your stock compensation agreement. Cost depends on complexity, but regardless of

by m0zg 7y ago

Best advice would be: don't do this yourself. Hire a lawyer, have them redline your stock compensation agreement. Cost depends on complexity, but regardless of complexity it's insignificant in comparison to getting screwed by e.g. vested stock repurchase rights, or not being able to exercise vested stock if you're fired (which you likely will be, if the situation calls for screwing you out of your vested shares, particularly if you stand to get a lot of them). I paid less than $500 for the review. Initial version of the agreement pretty much guaranteed I'd be screwed under all sorts of circumstances: from leaving on my own, to getting fired for (possibly made up!) cause, to company getting acquired. If the prospective employer does not agree to the redlined version, walk away. The founders and their lawyers will tell you it's what everyone else signs, but don't believe that for a minute: founders and investors themselves have different agreements, and "everybody else" are idiots if they sign something as important as this without a legal review. Remember, once that startup is worth something, that's when the knives come out. And come out they will if your agreement is not 100% ironclad, which is not something you can do yourself.

kevinskii 7y ago
Tbis is very good advice. When I applied to some startups a few years ago and saw the kinds of equity games they were playing, I decided I would never accept a substantial equity offer without first having it vetted by a lawyer. Even if you take the time to learn about ICOs by reading guides like this one, there are just too many ways to be taken advantage of.
harryh 7y ago
This is bad advice for the vast majority of startup employees (basically anyone who is not an executive, and even most executives) because companies (rightfully so) will not accept redlined stock agreements for individual employees. In which case the employee will have paid a lawyer a bunch of money for for nothing in a way that is entirely foreseeable. Deciding that working at a startup (with the comp structures that come with that) isn't right for you? Totally fine. Startups aren't for everyone. But don't go waste money on a lawyer who's work will 100% for sure just get thrown in the garbage. TBH any lawyer who even takes this work is either bad (because they don't realize the work is a waste) or a scammer (because they know and don't care).
- m0zg 7y ago
  harryh, before writing this you should have disclosed that you're "CTO at Attentive", as your HN profile states. It goes without saying that you won't like this advice, because it's absolutely, unequivocally 100% the right advice for senior prospective employees such as myself (and you, as well, but you already knew that). I don't see how it's even up for debate that a lawyer should review any agreements when substantial equity is involved - they're full of abusive clauses by default, and people are absolutely clueless about the finer points of all this. This is something a cursory skimming of a single article is not going to fix. Don't like the redlines? They're pretty easy to avoid: just don't put this bullshit in your equity agreements.
  - tptacek 7y ago
    This is fucked up. He's giving the advice because it's true (I've had the experience he's describing). Giving the true advice (or not!) isn't going to cost him a dollar, and, regardless: * Accusing people of commenting in bad faith like this is against the HN guidelines, and * Bringing personal details about commenters in threads into arguments is very against the HN guidelines.
    - m0zg 7y ago
      I've had the opposite experience though: they hemmed and hawed and then signed my redlined agreement. And I don't see why pointing out something that's in the user profile is "very" against the guidelines. And "walk away" is a good advice for startups in general nowadays, for reasons outlined here: https://danluu.com/startup-tradeoffs/ https://danluu.com/startup-tradeoffs/, even without abusive clauses in equity contracts. I did win the lottery in the end, but very few people do. Even fewer if they don't have their contracts reviewed by a lawyer. I have similar experiences now as well, when doing consulting work: I have my lawyer redline nearly every single contract, as, I'm sure, you do as well. Not once have I lost any work because of this.
      - tptacek 7y ago
        Then say that. What you said was not OK. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=author%3Adang%20personal%20details&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... The thing to do here to course-correct is to apologize. That doesn't involve conceding your argument. In fact, it will make people take your argument more seriously.

by m0zg 7y ago

kevinskii 7y ago

Tbis is very good advice. When I applied to some startups a few years ago and saw the kinds of equity games they were playing, I decided I would never accept a substantial equity offer without first having it vetted by a lawyer. Even if you take the time to learn about ICOs by reading guides like this one, there are just too many ways to be taken advantage of.

harryh 7y ago

This is bad advice for the vast majority of startup employees (basically anyone who is not an executive, and even most executives) because companies (rightfully so) will not accept redlined stock agreements for individual employees. In which case the employee will have paid a lawyer a bunch of money for for nothing in a way that is entirely foreseeable. Deciding that working at a startup (with the comp structures that come with that) isn't right for you? Totally fine. Startups aren't for everyone. But don't go waste money on a lawyer who's work will 100% for sure just get thrown in the garbage. TBH any lawyer who even takes this work is either bad (because they don't realize the work is a waste) or a scammer (because they know and don't care).

m0zg 7y ago
harryh, before writing this you should have disclosed that you're "CTO at Attentive", as your HN profile states. It goes without saying that you won't like this advice, because it's absolutely, unequivocally 100% the right advice for senior prospective employees such as myself (and you, as well, but you already knew that). I don't see how it's even up for debate that a lawyer should review any agreements when substantial equity is involved - they're full of abusive clauses by default, and people are absolutely clueless about the finer points of all this. This is something a cursory skimming of a single article is not going to fix. Don't like the redlines? They're pretty easy to avoid: just don't put this bullshit in your equity agreements.
- tptacek 7y ago
  This is fucked up. He's giving the advice because it's true (I've had the experience he's describing). Giving the true advice (or not!) isn't going to cost him a dollar, and, regardless: * Accusing people of commenting in bad faith like this is against the HN guidelines, and * Bringing personal details about commenters in threads into arguments is very against the HN guidelines.
  - m0zg 7y ago
    I've had the opposite experience though: they hemmed and hawed and then signed my redlined agreement. And I don't see why pointing out something that's in the user profile is "very" against the guidelines. And "walk away" is a good advice for startups in general nowadays, for reasons outlined here: https://danluu.com/startup-tradeoffs/ https://danluu.com/startup-tradeoffs/, even without abusive clauses in equity contracts. I did win the lottery in the end, but very few people do. Even fewer if they don't have their contracts reviewed by a lawyer. I have similar experiences now as well, when doing consulting work: I have my lawyer redline nearly every single contract, as, I'm sure, you do as well. Not once have I lost any work because of this.
    - tptacek 7y ago
      Then say that. What you said was not OK. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=author%3Adang%20personal%20details&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... The thing to do here to course-correct is to apologize. That doesn't involve conceding your argument. In fact, it will make people take your argument more seriously.