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Ask HN: Am I being fooled at a Dutch startup?

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Re: Ask HN: Am I being fooled at a Dutch startup?

#11

Post by throwaway106720 »

jacquesm wrote: post #8

I can't tell you for sure, but it feels off if the deal was changed compared to what it was stated as before. But you probably should have pushed a bit harder on them formalizing the STAK agreement earlier. Still, it could be nothing at all and maybe they simply aren't aware that your original deal was a different one, but such things rarely (if ever) happen by accident. Also: there are ways to use a STAK to screw th…

Thanks for the advice! I agree, I think things like these rarely happen by accident.

Re: Ask HN: Am I being fooled at a Dutch startup?

#12

Post by jacquesm »

throwaway106720 wrote: post #11
jacquesm wrote: post #8

I can't tell you for sure, but it feels off if the deal was changed compared to what it was stated as before. But you probably should have pushed a bit harder on them formalizing the STAK agreement earlier. Still, it could be nothing at all and maybe they simply aren't aware that your original deal was a different one, but such things rarely (if ever) happen by accident. Also: there are ways to use a STAK to screw th…

Thanks for the advice! I agree, I think things like these rarely happen by accident.

The notary that handles the STAK paperwork is an impartial party, you could approach them to ask if they are aware that the deal offered is not the one originally agreed to, the notaries tend to take a very dim view of such tricks and may well act on your behalf.

Re: Ask HN: Am I being fooled at a Dutch startup?

#13

Post by throwaway106720 »

mongrelion wrote: post #4

Reach out to Watson Parken, they are an Accounting & Financial Advice firm based in Zaandam. They will be able to give you the best advice you need for your personal situation. Hourly rate is ok if you team up with the other engineers and pay the hourly fee together.

Thanks for the advice. Hopefully, I can team up with some colleagues.

Re: Ask HN: Am I being fooled at a Dutch startup?

#14

Post by jacquesm »

FearNotDaniel wrote: post #3

First rule of con artists, poker players and startup founders: if you can't tell who the sucker is, it's you. Doesn't matter what they promise you, it's all smoke and mirrors and they can take it away or make it worthless any time they like. Negotiate the best salary you can, and don't give up a single cent of that monthly money in the bank against some empty promise of future riches. You already suspect they're lyin…

This is practical, but ultimately not the best advice, the OP already has a lot of time and potentially money sunk into this endeavor and should at least ascertain their position before making rash moves.

Your advice works well before engagement.

Re: Ask HN: Am I being fooled at a Dutch startup?

#16

Post by lr4444lr »

Wait, you're 2 years in, and you signed a contract to a different vesting schedule? This is setting off alarms in my head. Your equity rights are part of your comp., and what is earned in a prior agreement that was signed when you started cannot just be made contingent again by adding new requirements. At least not in the USA. I'd get a legal consult ASAP.

Re: Ask HN: Am I being fooled at a Dutch startup?

#17

Post by y7 »

Wait, you were offered an equity package years ago but are only now receiving the certificates, and there is still a remaining vesting schedule? This sounds extremely fishy.

I think a fixed-time vesting over 4 years is pretty standard, starting from the moment of employment, with no additional terms. If they're not happy with your performance, they should fire you, rather than withholding shares. I think 0.6% of shares is quite low, and the tax reasons sound dubious.

> How do I make sure what I vest, I really do vest and they don't change the rules again?

The position of non-voting shares is quite precarious I think, because a voting majority in the company can simply dilute shares and render the STAK-owned shares less valuable. Besides that: just read the contracts, the STAK bylaws, and once you sign the certificate holder agreement it's relatively ironclad. I'd recommend getting some legal advice.

Re: Ask HN: Am I being fooled at a Dutch startup?

#18

Post by rsstack »

SOLAR_FIELDS wrote: post #6

Related because it’s such a common refrain: Is it possible, as a founding engineer or similar, to structure the contract in such a way as to make your shares undilutable? I suspect the answer is theoretically yes, but would be interested in how it works out in practice.

Anything other than pro-rata with MFN will have a tax liability for you.

If the company was valued at $1M when you joined and you got 1% (simple numbers), and then the company raises $2M at a $10M pre-money valuation, your share goes down to 1%*(10/12)=0.83%. To keep you from dilution without you buying new stock, then company would "gift" you new shares, about 0.17% (a bit less but it doesn't matter). You'd then have to pay regular income tax on those $20k worth of stocks, likely at the highest tax bracket. It gets worse with higher valuations, and if it's your first startup you'll likely go bankrupt from the taxes before you get to a liquidation event.

(Having pro-rata rights doesn't make this cheaper: you'd need to pay the company the whole $20k to exercise your rights. My goal was to demonstrate that there isn't a way to get no dilution for free.)

Re: Ask HN: Am I being fooled at a Dutch startup?

#19

Post by throwaway106720 »

y7 wrote: post #17

Wait, you were offered an equity package years ago but are only now receiving the certificates, and there is still a remaining vesting schedule? This sounds extremely fishy. I think a fixed-time vesting over 4 years is pretty standard, starting from the moment of employment, with no additional terms. If they're not happy with your performance, they should fire you, rather than withholding shares. I think 0.6% of shar…

> I think a fixed-time vesting over 4 years is pretty standard, no additional terms.

This was the intial offering. I agree on most of what you said. The package isn't that interesting (especially with the possbility dilution), the extra vesting requirements seem like it takes away the last bits.

Re: Ask HN: Am I being fooled at a Dutch startup?

#20

Post by notreallyserio »

y7 wrote: post #17

Wait, you were offered an equity package years ago but are only now receiving the certificates, and there is still a remaining vesting schedule? This sounds extremely fishy. I think a fixed-time vesting over 4 years is pretty standard, starting from the moment of employment, with no additional terms. If they're not happy with your performance, they should fire you, rather than withholding shares. I think 0.6% of shar…

> The position of non-voting shares is quite precarious I think, because a voting majority in the company can simply dilute shares and render the STAK-owned shares less valuable.

I figure this is probably the case with most employee stock grants -- it's unlikely they'll give out enough shares that even every employee working together could sway elections.

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