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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?

#21

Post by kohanz »

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…

I don't really get this rule in the context of a startup. In poker, the point is for there to be a win-lose arrangement where you are the winner. Are you saying that one should only consider joining a startup where they consider the founder(s) to be a "sucker"? I doubt that's a good plan.

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

#22

Post by akvadrako »

rsstack wrote: post #18
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 hav…

If your shares are going up so much that taxes on it are hard to pay, obviously your base salery should be higher.

If not, because you are just coasting, you should be selling shares to make up for it.

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

#23

Post by jacquesm »

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.

They could try that but if the STAK is properly administered then the notary public would insist on those new shares being paid in full into the company account. This particular trick is fairly well defended against in NL. But there are other ways in which a STAK certificate holder could be screwed out of their rightful share. The important thing to keep in mind here is that for every certificate there is a corresponding share with all of the right associated with that share, in that sense the situation of a certificate holder is not all that different form the situation that a minority shareholder in a company finds themself in with the major difference being that certificate holders themselves do not get to vote and that someone else gets to vote the block of shares in the STAK. If that person were to act against the interest of the certificate holders in any other capacity then they would open themselves up to a pretty good case for a legal challenge.

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

#24

Post by rsstack »

akvadrako wrote: post #22
rsstack wrote: post #18

Earlier quoted context omitted.

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 hav…

If your shares are going up so much that taxes on it are hard to pay, obviously your base salery should be higher. If not, because you are just coasting, you should be selling shares to make up for it.

The real error in my comment is that the company could give an ESOP refresh for the missing percentage.

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

#25

Post by anamax »

> So it is not only time-based now. (it was said this was for tax reasons)

You're about to find out exactly what terms you are on with the founders.

The easy way to find out if it's really for tax reasons is to find out whether the changes apply to everyone or just the peons. If they won't tell you, you know the answer and you know that they'll lie to you.

FWIW, if there is a legitimate difference between your terms and theirs, it's because real tax reasons apply more strictly to the folks at the top than the bottom. If your terms are worse....

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

#26

Post by AussieWog93 »

Just to add an alternative point of view: startup founders are not known for doing everything perfectly "by the books" in terms of legal/accounting stuff. It could just be laziness rather than the founder trying to fuck you over.

Of course, you know them better than any of us do. If you think it's an honest mistake he may have overlooked, just have a chat and it should be sorted for you.

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

#27

Post by janstice »

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.

I suspect that anyone offering such an agreement in a potentially venture funded startup would be so hopelessly naive that it would be a huge red flag for further issues down the track (partnership or co-op model might be a different story, but probably not).

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

#29

Post by mongrelion »

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.

Watson Parker* stupid autocorrect ;(

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

#30

Post by lovelearning »

kohanz wrote: post #21
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…

I don't really get this rule in the context of a startup. In poker, the point is for there to be a win-lose arrangement where you are the winner. Are you saying that one should only consider joining a startup where they consider the founder(s) to be a "sucker"? I doubt that's a good plan.

I interpreted it as a strategy: assume that all founders will act like con artists towards their employees ("all smoke and mirrors", "empty promises"), so make sure from the start that you don't end up a sucker.
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