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Thanks! Managerial support is more in relation to setting up the subsidiary, dealing with local authorities and employee contracts, hiring and so on since the C

Thanks! Managerial support is more in relation to setting up the subsidiary, dealing with local authorities and employee contracts, hiring and so on since the CTO is busy with management of the dev team and development of the platform. In this case, the local management of the tech company would act as the local counsel. The guys from startup are based in central and western europe and are focusin on getting the sales and sales team up and are not "very familiar" with eastern europe authorities or legal aspects and do not want to spend time with these "tasks". In regards to getting the ties cut as soon as possible: The discussion came up now since the initial contract is expiring but there is no rush in the actual transition. Startup is happy with the current contract and would like to extend it but for the tech company that does not really make sense since currently tech company has no profits out of the deal and held up the initial end of deal for which it got the equity. Adding a markup now would be an option but that markup would need to be pretty significant to be interesting... Also, the terms of the transition of the team (which all agree makes sense at given point in time) should be clarified – the stance of tech company is that the transition of the the team does not come "for free" which is the main discussion point.

sokoloff 5y ago
The last point seems totally fair (assuming the contract provides for that). A recruiter fee would typically be 30% of first year comp (payable around 90 days in). That might be a good anchor point in the discussions. If there’s no no-poaching clause, startup should prefer to pay a 25% bonus to the employees to encourage them to jump voluntarily, which is a small burning of bridges of course. For an intact team experienced with the product, maybe a slightly higher figure is in order, but realize that the startup is also going to have to retain these employees, so they’re likely to incur additional costs on their end as well, so you want to split the cake somewhat evenly. I’d imagine anywhere from 25-50% of first year salary would be the range that I’d expect to see, with maybe slight upside to the tech company side. The reason I suggest to hire an office manager is exactly to offload the CTO from those office/company time sucks, leaving them to focus on the tech and the team. Edit to add: I view that minor transition tasks are pre-paid by having 7.5% of a company you hope will succeed.
- polygonwindow- 5y ago
  so for the transition per se you say a standard recruiter fee would apply in this case? This seems pretty low considering its a full team that built and provides the whole "technology" of the startup.
  - sokoloff 5y ago
    I could see it being higher (50 being larger than 30), but it’s a one-off negotiation at this point and you don’t want to zero out your 7.5% stake by being too aggressive and bleeding the company of cash.

sokoloff 5y ago

The last point seems totally fair (assuming the contract provides for that). A recruiter fee would typically be 30% of first year comp (payable around 90 days in). That might be a good anchor point in the discussions. If there’s no no-poaching clause, startup should prefer to pay a 25% bonus to the employees to encourage them to jump voluntarily, which is a small burning of bridges of course. For an intact team experienced with the product, maybe a slightly higher figure is in order, but realize that the startup is also going to have to retain these employees, so they’re likely to incur additional costs on their end as well, so you want to split the cake somewhat evenly. I’d imagine anywhere from 25-50% of first year salary would be the range that I’d expect to see, with maybe slight upside to the tech company side. The reason I suggest to hire an office manager is exactly to offload the CTO from those office/company time sucks, leaving them to focus on the tech and the team. Edit to add: I view that minor transition tasks are pre-paid by having 7.5% of a company you hope will succeed.

polygonwindow- 5y ago
so for the transition per se you say a standard recruiter fee would apply in this case? This seems pretty low considering its a full team that built and provides the whole "technology" of the startup.
- sokoloff 5y ago
  I could see it being higher (50 being larger than 30), but it’s a one-off negotiation at this point and you don’t want to zero out your 7.5% stake by being too aggressive and bleeding the company of cash.