Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#1

Post by colund » Thu, Sep 10, 2015, 11:25 AM UTC

A former colleague has founded an Uber for X startup. They want me to join without salary to build their software from scratch. After having worked there for free for a almost year (or even longer if I don't work full time) I would get stocks worth the salary I never got, to become co-owner.

Do you think this a good deal to consider? I think becoming stake in an Uber for X business sounds like fun but I am afraid I can't get by on savings and I would lose most of my current job security and salary. Risk/reward, opportunity cost? I'm really hesitant to work for free in return for stocks...

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#2

Post by nilved » Thu, Sep 10, 2015, 11:41 AM UTC

Absolutely not. Creating an Uber for X startup and working for free are two of the worst ideas I've ever heard.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#3

Post by GeoffreyKr » Thu, Sep 10, 2015, 12:33 PM UTC

1- get the stock first 2- then only work...

If your former colleague wants you onboard, let him make you co owner first.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#4

Post by ksherlock » Thu, Sep 10, 2015, 12:55 PM UTC

Don't listen to the naysayers! This is a good learning opportunity. For example, you'll learn why you shouldn't spend a year (or more) working for free on a former colleague's Uber for X startup.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#5

Post by taprun » Thu, Sep 10, 2015, 1:10 PM UTC

If you are going to build it for free, why do you need him? Just build it yourself.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#6

Post by colund » Thu, Sep 10, 2015, 1:13 PM UTC

taprun wrote: post #5

If you are going to build it for free, why do you need him? Just build it yourself.

He has customers and drivers but cannot scale without a system.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#7

Post by mindvirus » Thu, Sep 10, 2015, 1:48 PM UTC

Startups are great - you get a ton of ownership and the chance to see a business grow. Even if it fails it'll be a huge educational experience.

However, this sounds fishy for a couple of reasons - but maybe the guy just doesn't know how to structure this.

With one year vesting, he wants to protect himself from the scenario where you work for 3 months and own a big chunk of the company. That's legitimate. However, get the amount of equity on paper. You are taking a risk here too so it should be far in excess of just covering your salary at an arbitrary valuation. The general advice is that if you are not getting paid, you are a founder - your equity take should be a double digit percent of the company (typically vesting over 4 years with a 1 year cliff).

The other thing to consider is what he is bringing to the table. If it's just the idea of Uber for X it's not worth much. If he has business contacts though - for example he's well connected to the industry X then maybe he's bringing a lot more.

Don't be a sucker though, and don't work for free or for vague promises. Get agreements on paper now. And don't undersell yourself.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#8

Post by Someone1234 » Thu, Sep 10, 2015, 2:11 PM UTC

Heck no.

I'm going to ignore the whole "working for free" question for a second, and how you will almost certainly never be compensated.

The issue I take with this is: If you're working for free then stock should be given to you from day #1, not suddenly given to you in a lump sum after a year. The way you describe this, the owner can fire you after 364 days, and you aren't entitled to stock or financial compensation. And frankly, some of the people I've met in the startup world are sociopaths and will happily fire someone after 364 to keep a large % stakehold in their company, then will rationalise it, and sleep like a baby.

Now taking stock over a salary is a bad idea in general as stock in startups rarely pays out. And if you're taking stocks in lieu of salary they should be worth MORE than salary given the levels of risk and the relative values to you (stock is worthless even for years after you receive it). Plus stock's value is subjective anyway, are they going to get a valuation by an independant organisation, or just declare the company's value arbitrarily?

Honestly the whole thing sounds like a great deal for them, and a terrible deal for you.

You better be best buddies with this guy to consider this since trust is key here. If they're taking a salary then run away. I'd also re-negotiate so some stock is given earlier so less lump-summing occurs.

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#9

Post by colund » Thu, Sep 10, 2015, 2:30 PM UTC

mindvirus wrote: post #7

Startups are great - you get a ton of ownership and the chance to see a business grow. Even if it fails it'll be a huge educational experience. However, this sounds fishy for a couple of reasons - but maybe the guy just doesn't know how to structure this. With one year vesting, he wants to protect himself from the scenario where you work for 3 months and own a big chunk of the company. That's legitimate. However, get…

He has very good industry connections but I'm still very hesitant and think I'll say no.

Thanks for your great comment!

Re: Ask HN: Should I quit my job (or work part-time) to join an Uber for X startup

#10

Post by cdnsteve » Thu, Sep 10, 2015, 2:50 PM UTC

Work for free! Sounds like a great way to earn a living.