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Ask HN: When are you allowed to quit a startup?

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Re: Ask HN: When are you allowed to quit a startup?

#11

Post by throwaway52 »

sirsean wrote: post #9

I've been an early employee / only programmer in a startup in the past, in which the founder said the exact same thing -- once we get to "revenue neutral," you'll get "a big share of equity." It won't happen. They only said that to keep a carrot in front of you for a little while longer. If the company ever gets to revenue neutral, their idea of a "big share" will suddenly change. After all, why give a programmer a s…

Thanks for the experience based insight. I've had that nagging worry all along.

Part of me has wanted to be a bit more trustworthy as they've shown themselves to be very friendly people -- I regularly go to bars with the CEO outside of work, the COO and I share interests and talk about them/engage in them (being vague here), etc. But I think your point is pretty clear and well thought out. And pretty much not arguable. Thanks for that.

Re: Ask HN: When are you allowed to quit a startup?

#12

Post by throwaway52 »

gte910h wrote: post #3

You're just an employee, if you feel your company is going under, find other employment. Once you find another offer, they'll either offer you a share of the company to stay, or you can leave.

This is probably true -- though I've been in situations like that before (swap shares for money) and never take them as I just don't think that type of very passive "threat" (for lack of a better term) is ever fruitful. But, on the other hand, I don't have a ton of business experience, so maybe it would work out. Do you have any experience in those situations? Staying after discussing leaving?

Re: Ask HN: When are you allowed to quit a startup?

#13

Post by RuadhanMc »

sirsean wrote: post #9

I've been an early employee / only programmer in a startup in the past, in which the founder said the exact same thing -- once we get to "revenue neutral," you'll get "a big share of equity." It won't happen. They only said that to keep a carrot in front of you for a little while longer. If the company ever gets to revenue neutral, their idea of a "big share" will suddenly change. After all, why give a programmer a s…

Yep. No big slice of the pie for you. Actually, what they'll do is give you a crumb that fell off the pie and make you wait 4 years before you can eat it.

Tomorrow never happens.

Re: Ask HN: When are you allowed to quit a startup?

#14

Post by shashmundar »

throwaway52 wrote: post #7
smallegan wrote: post #4

Why does a company with only one programmer have a CFO and a COO? Also, why wouldn't you be the CTO and have a share if they are all about titles... I'd say it seems like maybe you are being taken advantage of and it might be time to jump ship. Good luck!

You'd be amazed ... when I first started I reported to the (then) COO who reported to the CEO. But we all sit in the same room, so I'd ask the COO my question, and then he would turn and ask the CEO, who would turn and answer the COO who would then turn and answer me. But your point about being taken advantage of has been in the forefront of my mind. Thanks for giving that some credence.

It seems your skills are being mishandled, sir. I would recommend you keep the rainbow appearance (where all looks well) until you find another crutch to lean on (another job offer).

This is always my argument when I'm confused about what to do, and it's always helped: We only have one life, that we know of. Might as well make the most of it.

If you feel your time is better spent somewhere else, than you have your answer. Best of luck m8.

Re: Ask HN: When are you allowed to quit a startup?

#15

Post by RuadhanMc »

throwaway52 wrote: post #10
gaius wrote: post #8

Earlier quoted context omitted.

Why do they only want to give you a share when they're revenue-neutral? A limited company, their liability is extremely limited, I'm assuming it's not a partnership. There's no reason for them not to give you equity right now .

From what they said was that to give out shares at this point would require additional lawyer fees. They are already formed as an S corp (I believe), so I'm not sure how much lawyer fees would be required, but nevertheless, I was young and naive when I first started (this is my first startup) and probably should have pushed a bit harder.

The truth is that they might actually believe that they'll give you a "big slice of the pie" once the money starts rolling in but in reality what will happen is that they'll a) get greedy and b) be able to afford someone(+) to replace you if you complain too much.

It's just aaahhh business and you're out of a job with no pie.

Re: Ask HN: When are you allowed to quit a startup?

#16

Post by shashmundar »

throwaway52 wrote: post #12
gte910h wrote: post #3

You're just an employee, if you feel your company is going under, find other employment. Once you find another offer, they'll either offer you a share of the company to stay, or you can leave.

This is probably true -- though I've been in situations like that before (swap shares for money) and never take them as I just don't think that type of very passive "threat" (for lack of a better term) is ever fruitful. But, on the other hand, I don't have a ton of business experience, so maybe it would work out. Do you have any experience in those situations? Staying after discussing leaving?

If you discuss leaving, make sure to look sincere in the discussion. This means steer the conversation so it shows how you are worried about your future financially and therefore you need to be proactive (have them empathize with you and see you as a human, not an employee).

In case you decide to return to the company, this way you will have retained some of their respect.

Re: Ask HN: When are you allowed to quit a startup?

#17

Post by dragoon »

Let's get real about something: they're business guys, and you're the technical muscle, right? You seem young, and you're probably as good at sizing them up (note your "great people" comment) as the average MBA is at writing code; by this, I mean, not at all. Don't even try. Make your decisions based on hard facts, such as how much equity you have already and when you will start collecting a salary, and not based on "warm fuzzy" feelings of loyalty or how much you will get "when times change". Unless you're seasoned and have been in the business world for a decade or so, you are way out of your depth when trying to size such people and their promises up. (Of course you like them! Their job is to make people like them. They probably like you, but do they respect you?) Business people over-promise because the worst of them are sociopaths and the best of them have great intentions and are wonderful people but still are ridiculously overconfident, just because they have to be in order to succeed in that world.

They may be great guys, but you really need to get a firm commitment regarding equity. You're taking a risk and have a right to know what the rewards will be. A promise, especially a subjective one, means nothing. What does a "big" share even mean? If the company is valued at $2 million and you get 0.25%, that's a $5000 bonus, which can be described as "big" but is quite lousy in comparison to what you actually deserve. Remember that the business guys, due to the overconfidence that is characteristic of that sort, would still consider such a grant very generous. After all, it's going to be a $10 billion company one day, and that 0.25% is going to make you a millionaire many times over, no?

You're taking as much risk as they are, and you actually have the technical skills. You deserve a better deal. If your leaving would hurt them as much as you think it would, then they will give you equity, and they'll actually respect you more now that you're not letting them take advantage of you. Or, they might let you go, in which case you're better off to have this happen sooner rather than later, after having wasted even more time.

Re: Ask HN: When are you allowed to quit a startup?

#18

Post by swombat »

throwaway52 wrote: post #7
smallegan wrote: post #4

Why does a company with only one programmer have a CFO and a COO? Also, why wouldn't you be the CTO and have a share if they are all about titles... I'd say it seems like maybe you are being taken advantage of and it might be time to jump ship. Good luck!

You'd be amazed ... when I first started I reported to the (then) COO who reported to the CEO. But we all sit in the same room, so I'd ask the COO my question, and then he would turn and ask the CEO, who would turn and answer the COO who would then turn and answer me. But your point about being taken advantage of has been in the forefront of my mind. Thanks for giving that some credence.

The very fact that they have both COO and CEO in startup mode is a huge red flag, btw. That "reply wave" that you describe is also an enormous wtf.

Run.

Re: Ask HN: When are you allowed to quit a startup?

#19

Post by throwaway52 »

swombat wrote: post #18
throwaway52 wrote: post #7

Earlier quoted context omitted.

You'd be amazed ... when I first started I reported to the (then) COO who reported to the CEO. But we all sit in the same room, so I'd ask the COO my question, and then he would turn and ask the CEO, who would turn and answer the COO who would then turn and answer me. But your point about being taken advantage of has been in the forefront of my mind. Thanks for giving that some credence.

The very fact that they have both COO and CEO in startup mode is a huge red flag, btw. That "reply wave" that you describe is also an enormous wtf. Run.

The first flag was when they told me that not to worry, when we brought on a second programmer, he would report to me. Heh.

Re: Ask HN: When are you allowed to quit a startup?

#20

Post by tjp »

What really caught my eyes is the Christmas prediction. I used to work for a startup that ended up belly, hmm, sideways, and the process a -lot- longer than I expected. Money ran out in November. In December, they laid off 10%, and then there was always someone to cough up some money to make the whole thing going, until June, when the company was bought up (and I said goodbye) - it took another 6 months for the new owners to decide to get rid off the team. It may have been lucky for us, but generally: belly-up takes time.

But, it doesn't really change the fact that your bosses appear to be not the nicest people in the world.

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