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Ask HN: Am I being offered a fair startup equity?
I work for a technology startup that has raised 3 million dollars in angel investing so far. The comapny is now ready for first round of manufacturing and attempting to get the next round of investing.
I've been in the company for two years and instrumental in getting their software and hardware products developed from scratch. I get a slightly below (or maybe avg for mid-west) market rate salary.
I'm being offered this
* 15% salary hike
* 1% of the "net proceeds of any company sale and profit distribution"
* and a promotion to head of software development in a Dir of Tech role.
My questions are
* is 1% of "net proceeds" same as 1% equity stake in the company?
* Will I still have 1% stake in the company after subsequent rounds?
Posted from a throw-away account. I've been on HN for couple of years now.
- garry 16y ago1) no, sounds like profit sharing which is not equity. 2) n/a, but even if it was equity then no, no guarantees regarding dillution.
- StarterUpper 16y agothanks.
- dwc 16y agoBelow are two scenarios that seem to fit what you've said. There may be more, of course. A) Others provide vision, direction, and everything else except doing the tech work. You provide excellent design and implementation to fulfill the vision of others. They should pay you more money. B) You help define and drive the vision through your insights into tech. You have helped shape the company and the product rather than only built it. You should have an equity stake.