I constantly run into situations, where it would be useful to recruit additional non-founder programmers to help out on a project. However, I am not sure what compensation should look like for these non founders. I.e. We have been working on a project part-time for over a year, but could use another rails developer to help out on our front-end work. We'd like to pay with equity, but I am not sure what that normally looks like. Ideas?
Ask YC: How can you recruit and reward non-founder programmers at early stages?
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Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#2How much equity have you set aside for non-founders in total?
Are you intending on hiring other developers? Is the developer you're hiring permanent?
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#35-10% depending on the quality of the developer is what I have done in the past and as soon as we start making cash they start getting paid. Also I only do this deal with folks I know well as it is so much more complicated than standard hiring.
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#4well right now the ball is in your court. There really aren't that many jobs out there, so you can get a decent programmer who'll take the pay cut just to have a job.
But you do have some other options.
You can give out different titles, lets say someone is just starting out, and you start calling them senior developer on paper, no impact now, but for their next job they'll be able to ask for a lot more money .
The stock options etc have been mentioned, so I won't cover it.
Office space, stay away from the cubicles, and have a relaxed policy.
Workhours, instead of working 9 to 5, offer them to work 10 to 5. + have general flexibility, better to have a good programmer for 4 days, than have someone crappy for 5.
Basically use small stuff like this to make yourself appealing to a certain niche of programmers. So that they'll be much more willing to take a pay cut and work for you.
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#55-10% depending on the quality of the developer is what I have done in the past and as soon as we start making cash they start getting paid. Also I only do this deal with folks I know well as it is so much more complicated than standard hiring.
So much more complicated is an understatement. Complications with IP, firing and sickness spring to mind.
If you know the person well you still need to be careful with the contract but you should be less likely to fire them and get into an argument about equity.
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#6well right now the ball is in your court. There really aren't that many jobs out there, so you can get a decent programmer who'll take the pay cut just to have a job. But you do have some other options. You can give out different titles, lets say someone is just starting out, and you start calling them senior developer on paper, no impact now, but for their next job they'll be able to ask for a lot more money . The s…
"There really aren't that many jobs out there, so you can get a decent programmer who'll take the pay cut just to have a job."
Taking a pay cut is one thing, working for free (just equity) is something else entirely. Not sure if the current situation gives you any kind of an advantage to recruit people for equity only compensation. (If I understand the top post correctly).
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#75-10% depending on the quality of the developer is what I have done in the past and as soon as we start making cash they start getting paid. Also I only do this deal with folks I know well as it is so much more complicated than standard hiring.
So much more complicated is an understatement. Complications with IP, firing and sickness spring to mind. If you know the person well you still need to be careful with the contract but you should be less likely to fire them and get into an argument about equity.
To think about it, knowing the person well might even be worse if you end up in a sticky situation. Not only have you just lost a friend, but your reputation as well. Moreover, chances are high that he/she will be in the same social circles as you - which ends up getting even more messy
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#81) Achieve revenues.
2) Hire freelancers for well-defined specific tasks targeted at increasing revenues, aiming at the low-hanging fruit first.
3) Repeat until you have your own private island.
This works for other skilled workers besides programmers, too. I don't make nearly enough from BCC to hire my writer full time (she has a masters degree and has commitments that make full time impossible at any price) but I get an awful lot of bang out of $100 per month.
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#9As a developer, something I worked out with a startup trying to save some cash was that I would work for about half my normal hourly rate up-front.
Then I would take a share in the startup's revenue (not equity - say 20% of gross income) until the other half of my hourly rate was made up for - this could take a year or two years etc, or if the startup is very successful it could only take 3 months; but it is capped to the total 50% of the hourly rate * number of hours worked.
I also would take an extra share of revenue, say for the first year, as a potential bonus for taking on the risk of possibly not earning my full developer rate if the startup fails. This extra could be 5% or 10% of the first year or two years' revenue but is not capped and so if the startup is very successful the developer could do quite well, but the founders have not sacrificed any long-term equity in their business.
I thought that was a nice way to give the developer a share of the business' success without actually giving up equity, and also without asking the developer to take a total risk that they could have wasted their time and never receive anything for it.
Re: Ask YC: How can you recruit and reward non-founder programmers at early stages?
#10As a developer, something I worked out with a startup trying to save some cash was that I would work for about half my normal hourly rate up-front. Then I would take a share in the startup's revenue (not equity - say 20% of gross income) until the other half of my hourly rate was made up for - this could take a year or two years etc, or if the startup is very successful it could only take 3 months; but it is capped t…
This is creative, but the problem with clever 'backpay' solutions and startups is that often they are starved for cash, so the extra 5% or 10% is valuable money that they could be using to grow the business.
From an owner's perspective, I would never spend future revenue today. What if your not making enough money to pay the bills, yet have to give a percentage of revenue to a developer? They aren't going to stick around if things get tough.
It would be slightly safer to agree to a percentage of profit, but much better to just give a percentage of the company. The same could be said for replacing the lower salary. When you go to work for a startup there is a reason you get paid less: cash in the early stages is extraordinarily precious. This can not be said loud enough. I would not work for a company that didn't understand this.
It's a battle to start a company, and you really need everyone "in the same boat". If it sinks, everyone loses out.