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Great advice. Always have acceptable alternatives in mind. For instance, propose that they accelerate vesting on your remaining options 50 cents on the dollar.

Great advice. Always have acceptable alternatives in mind. For instance, propose that they accelerate vesting on your remaining options 50 cents on the dollar. So if they want you to give up 2% they would instantly vest 1%. The term here is "single trigger". Point being, be creative and try to work out a deal. A 4% starting offer isn't unreasonable.

Silhouette 12y ago
A 4% starting offer isn't unreasonable. ::boggle:: From the description given, it sounds like there are two suits running the show with control of the business and the overwhelming majority of the financial interest. I'm assuming from context that the OP is the technical guy who dug the cofounders out of a mess when their initial outsourced product development was not of an adequate standard, and did so in return for only a 10% stake and poor immediate compensation. Apparently this got them to the point where they could start hiring more staff and taking serious investment. It sounds like the OP was probably already shortchanged on both the equity and the direct compensation. I don't see any way a 4% offer is anything but a cheap shot/insult in this scenario.
- encoderer 12y ago
  > I'm assuming from context that the OP is the technical guy who dug the cofounders out of a mess when their initial outsourced product development was not of an adequate standard, and did so in return for only a 10% stake and poor immediate compensation I'm making fewer assumptions. And more importantly, I've learned that in a negotiation, being "insulted" by the first offer doesn't help me in negotiating an ultimate agreement. I think a counter-offer will get you a lot further than righteous indignation.
  - Silhouette 12y ago
    The opening offer reveals that the other parties are either naive or trying to take the OP for a ride. Either way, they've probably already forfeited any benefit of the doubt they might otherwise have deserved in negotiations. That's not righteous indignation, it's just knowing who is sitting on the other side of the table when you're negotiating, and hopefully ensuring that you protect yourself accordingly in any final deal you agree on.
maaku 12y ago
It's totally unreasonable, even as a starting offer. These guys just signaled that they are not serious people.
- JVIDEL 12y ago
  TBH I'm surprised OP didn't ask for 50% after seeing how crappy/amateur the entire operation was, and how bad his compensation was. BTW OP, did you get a signed agreement? were there any clauses that might be relevant to this?
Aqueous 12y ago
He shouldn't be giving up any of his shares. At all. He should be demanding more options. In all likelihood - he's the reason the business exists. They would have nothing without him.
- danielweber 12y ago
  Unfortunately it all depends on his bargaining position right now. It might feel good for the rest of us for him to take one for the team and stand up for his rights, but it could lead to him having a worse outcome if those rights are beyond his bargaining position.
- Silhouette 12y ago
  They would have nothing without him. The trouble is, that probably isn't true. They might have had nothing without him before, but now they have 16 people left without him, and presumably by now some of those other people are technical as well. So, his relative importance may already have been reduced from "indispensable" to "valuable technical leader", and his personal negotiating position is getting weaker all the time as the business grows. He may have to give up something of value now to consolidate his position for the long term, but if he's been suckered already then consolidation may be the best course of action that is still available to him. Of course even a somewhat reduced but secured stake in the business may still work out very lucrative if the company is successful at its new scale and funding. The real question is how much influence he has left to give up as little as possible while securing the rest.
- pbreit 12y ago
  Not really. They could let him go and find someone else (or promote internally) for much less.
- edanm 12y ago
  That's a pretty terrible sentiment. Unless you know something that wasn't told in this thread, why would you think that?

Silhouette 12y ago

A 4% starting offer isn't unreasonable. ::boggle:: From the description given, it sounds like there are two suits running the show with control of the business and the overwhelming majority of the financial interest. I'm assuming from context that the OP is the technical guy who dug the cofounders out of a mess when their initial outsourced product development was not of an adequate standard, and did so in return for only a 10% stake and poor immediate compensation. Apparently this got them to the point where they could start hiring more staff and taking serious investment. It sounds like the OP was probably already shortchanged on both the equity and the direct compensation. I don't see any way a 4% offer is anything but a cheap shot/insult in this scenario.

encoderer 12y ago
> I'm assuming from context that the OP is the technical guy who dug the cofounders out of a mess when their initial outsourced product development was not of an adequate standard, and did so in return for only a 10% stake and poor immediate compensation I'm making fewer assumptions. And more importantly, I've learned that in a negotiation, being "insulted" by the first offer doesn't help me in negotiating an ultimate agreement. I think a counter-offer will get you a lot further than righteous indignation.
- Silhouette 12y ago
  The opening offer reveals that the other parties are either naive or trying to take the OP for a ride. Either way, they've probably already forfeited any benefit of the doubt they might otherwise have deserved in negotiations. That's not righteous indignation, it's just knowing who is sitting on the other side of the table when you're negotiating, and hopefully ensuring that you protect yourself accordingly in any final deal you agree on.

maaku 12y ago

It's totally unreasonable, even as a starting offer. These guys just signaled that they are not serious people.

JVIDEL 12y ago
TBH I'm surprised OP didn't ask for 50% after seeing how crappy/amateur the entire operation was, and how bad his compensation was. BTW OP, did you get a signed agreement? were there any clauses that might be relevant to this?

Aqueous 12y ago

He shouldn't be giving up any of his shares. At all. He should be demanding more options. In all likelihood - he's the reason the business exists. They would have nothing without him.

danielweber 12y ago
Unfortunately it all depends on his bargaining position right now. It might feel good for the rest of us for him to take one for the team and stand up for his rights, but it could lead to him having a worse outcome if those rights are beyond his bargaining position.
Silhouette 12y ago
They would have nothing without him. The trouble is, that probably isn't true. They might have had nothing without him before, but now they have 16 people left without him, and presumably by now some of those other people are technical as well. So, his relative importance may already have been reduced from "indispensable" to "valuable technical leader", and his personal negotiating position is getting weaker all the time as the business grows. He may have to give up something of value now to consolidate his position for the long term, but if he's been suckered already then consolidation may be the best course of action that is still available to him. Of course even a somewhat reduced but secured stake in the business may still work out very lucrative if the company is successful at its new scale and funding. The real question is how much influence he has left to give up as little as possible while securing the rest.
pbreit 12y ago
Not really. They could let him go and find someone else (or promote internally) for much less.
edanm 12y ago
That's a pretty terrible sentiment. Unless you know something that wasn't told in this thread, why would you think that?