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

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

#1
A couple years ago I started working for a Dutch startup. I was offered an equity package, but didn't think much of it at that time. After going through a couple of funding rounds, well, I started looking into it. The Dutch structure is called STAK and is basically a company-in-a-company without any voting rights. Currently it is about 6% of company stock divided among 10 employees. I'm still very well aware that it could be worth 0 EUR in the end. I also very well aware of tricks being played by investors and engineers being squeezed out of their faire share. Since money came, it all about scaling up and getting a good exit.

A month ago I (and the other engineers) were finally able to sign the original STAK equity contract. It was apparently an additonal contract. This might be negligence on my side, but I simply didn't know. The equity package and vesting scheme is briefly mentioned in my initial contract. In this new contract the vesting scheme changed and included a lot of additional company and personal goals to be achieved. So it is not only time-based now. (it was said this was for tax reasons). Due to this it makes it a lot harder to vest any additional stock (about half would probably impossible to vest).

I'm on good terms with the founders and I think it is possible to renogatiate this. But I don't know where to start. I read a lot about equity packages at American startups, but this probably doesn't apply for my situation. Can anyone offer me advice - What to do best? - How do I make sure what I vest, I really do vest and they don't change the rules again? - Is it worth anything (even after an exit). - The additional goals were set because of tax authority rules (is this a straight out lie)?

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

#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 lying to you, don't lose any sleep over it, just ask yourself if the monthly salary is worth the work you do and if not, go somewhere else.

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

#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.

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

#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 the stak certificate holders out of their rightful share during a liquidity event so make sure that you know who represents the STAK, ideally a notary public should be assigned as the administrator of the STAK, and not someone in the management. Best of luck!

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

#9

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.

You usually have the option to buy newly issued shares pro-rata and at the same valuation as the other buyers, but I've never seen shares that can not be diluted (essentially that would mean automatically issuing and assigning shares to one or more shareholders without the issuing funds being paid and afaik no notary public will sign off on that, shares need to be paid into the proper vehicle).

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

#10

Do you have a lawyer? Have you ever had a lawyer look at any of these contracts? That is where I would start.

No, but I'm looking for a law firm that has experience with funded startups

There are a lot of them in Amsterdam, not cheap but usually quite effective, Loyens & Loeff comes to mind and possibly Kennedy & van der Laan.
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