The startup where I'm a second (of two) developer is getting funding soon. What do I have to expect, and how do I prepare myself?
Even though the perspective is very promising, the main concern is I'm just a contractor. Yeah, I have some stock "options", but I do not expect much from it since it isn't something valuable in general, especially for a contractor who is easy to fire. Only my leverage is the codebase/devprocess ownership.
My question is, for any advice from experienced people, what should I do or prepare myself? I very much appreciate any help!
Any advice for a develper in a startup about to get founded
1–9 of 9 posts
Re: Any advice for a develper in a startup about to get founded
#2That sounds like a messy situation.
Has the company been founded? It seems like it, but your headline suggests otherwise.
Figure out the following:
1. Who (legally) owns the code you wrote?
2. Have you talked to the founders? What is your general relationship?
3. Do you consider yourself a founder, a part of the team, or just a contractor for them? Do you even want to become a permanent part of the team?
4. Regarding the stock options, go talk to a lawyer to figure out what's your agreement is worth
Re: Any advice for a develper in a startup about to get founded
#3I assume this is in the US. At a small startup, I assume you'd frequently talk with the founders and could just share your concerns directly. If you don't trust the founders to be honest with you, then you may not want to join the company in a larger capacity.
Regarding the "leverage", neglecting to have you sign an IP transfer agreement would be a major oversight by the founders and a potential red flag.
I wonder how many founders are there and their roles? Are they fulltime? Is there a CTO? Or are the two contracted developers fully in charge of the product? It then comes down to what role you're looking for in the company, beyond being a contractor.
Also, how are they currently funded? Are they about to raise a seed round? You suggest your stock "options" aren't worth much. However, if the company is brand new and you're paid less than a market salary, then it's possible that owning substantial stock would be appropriate.
Re: Any advice for a develper in a startup about to get founded
#4That sounds like a messy situation. Has the company been founded? It seems like it, but your headline suggests otherwise. Figure out the following: 1. Who (legally) owns the code you wrote? 2. Have you talked to the founders? What is your general relationship? 3. Do you consider yourself a founder, a part of the team, or just a contractor for them? Do you even want to become a permanent part of the team? 4. Regarding…
1. Not me
2. We have enough discussion which make me pretty uncomfortable because of fact I'm treated as a very cheap hight quality contractor, not more, besides of tons of bullshiting as "we are one family" "building the team for a years" "one day we raise the money and everybody will be rich". The first batch of money is raised already but for the tech-team we got nothing but deadlines to new features to implement.
3. I would consider myself as core-team member, but legally is not. The founders in US, the tech-team in Asia, I don't really believe to their promising to bring us to US.
4. Thank you for the advice. I never had any experience with it, well, it's time.
Re: Any advice for a develper in a startup about to get founded
#5Expect to get screwed.
Re: Any advice for a develper in a startup about to get founded
#6I assume this is in the US. At a small startup, I assume you'd frequently talk with the founders and could just share your concerns directly. If you don't trust the founders to be honest with you, then you may not want to join the company in a larger capacity. Regarding the "leverage", neglecting to have you sign an IP transfer agreement would be a major oversight by the founders and a potential red flag. I wonder ho…
If I can change the situation, I will be a part of this team. The tech team has been treated as full-time employees for the last two years in terms of being available from 9 to 6, doing daily standups, reporting that the work gets done, sending sick leave emails, and cutting money because of that "skipped" days. Never get any "paid holidays" or something. Most of the time, my rate was less than 25usd per hour. Taking the worst part of being a contractor and employee is my daily life. This is our first "international job" for the second developer and me. Hence, we were happy just taking it and believing in the founder's promises of higher salary and equity options. If trusted to my profile on carta.com, the options equity is about 0.8%. My friends with experience in startups said it's ridiculous. Only a tiny contractor's hourly rate with a small amount of equity for such hard work to make the company profitable. We did it but got no bonuses besides "Thank you! Let's work harder!"
Re: Any advice for a develper in a startup about to get founded
#7I assume this is in the US. At a small startup, I assume you'd frequently talk with the founders and could just share your concerns directly. If you don't trust the founders to be honest with you, then you may not want to join the company in a larger capacity. Regarding the "leverage", neglecting to have you sign an IP transfer agreement would be a major oversight by the founders and a potential red flag. I wonder ho…
If I can change the situation, I will be a part of this team. The tech team has been treated as full-time employees for the last two years in terms of being available from 9 to 6, doing daily standups, reporting that the work gets done, sending sick leave emails, and cutting money because of that "skipped" days. Never get any "paid holidays" or something. Most of the time, my rate was less than 25usd per hour. Taking…
It sounds like you initially found the terms acceptable but now less so. From a contracting perspective, I'd decide what terms would make you happy then present them to the founders.
The founders might not realize that you feel this way (or they might just poorly express themselves virtually). You might let them know you want to be a team member, then show some examples why you don't feel that way now. This might help explain it.
Funding could give the founders more flexibility to pay you. I'd also keep in mind from their perspective it will be more difficult to make you an employee than someone in the US. Maybe you could help by presenting how you believe the process would work?
FWIW things could be worse. In the first startup I co-founded, I received both a lower hourly rate and less equity than you (though without my knowledge).
Re: Any advice for a develper in a startup about to get founded
#8That sounds like a messy situation. Has the company been founded? It seems like it, but your headline suggests otherwise. Figure out the following: 1. Who (legally) owns the code you wrote? 2. Have you talked to the founders? What is your general relationship? 3. Do you consider yourself a founder, a part of the team, or just a contractor for them? Do you even want to become a permanent part of the team? 4. Regarding…
1. Not me 2. We have enough discussion which make me pretty uncomfortable because of fact I'm treated as a very cheap hight quality contractor, not more, besides of tons of bullshiting as "we are one family" "building the team for a years" "one day we raise the money and everybody will be rich". The first batch of money is raised already but for the tech-team we got nothing but deadlines to new features to implement.…
Too many red flags.
I wouldn't even want to continue working with them as a contractor from what you have described here.
Sounds like they are looking primarily for cheap labor to work for them while them being on a power trip.
Good founders care about their team, even more so when the team is small enough for everyone to know everyone else.
Re: Any advice for a develper in a startup about to get founded
#9That sounds like a messy situation. Has the company been founded? It seems like it, but your headline suggests otherwise. Figure out the following: 1. Who (legally) owns the code you wrote? 2. Have you talked to the founders? What is your general relationship? 3. Do you consider yourself a founder, a part of the team, or just a contractor for them? Do you even want to become a permanent part of the team? 4. Regarding…
1. Not me 2. We have enough discussion which make me pretty uncomfortable because of fact I'm treated as a very cheap hight quality contractor, not more, besides of tons of bullshiting as "we are one family" "building the team for a years" "one day we raise the money and everybody will be rich". The first batch of money is raised already but for the tech-team we got nothing but deadlines to new features to implement.…
You and the other developer basically built the product to the point where they're able to get real, actual money into the founder's hands. That alone demonstrates that you have great ability in what you do and getting it done successfully.
The way these founders are carrying out their actions is pre-planned. Everything you listed that they did was to protect and set themselves up to be the sole owner and reap all the benefits. And considering you're from another country, there is a huge chance they'll just rip you off or break their employment agreements with you whenever they want (probably including sketchy math when it comes to options payout/dilution). And you will have no recourse unless you want to wait years and pay for the legal costs that come with it.
You can test the waters too. See if they'll make you a full time employee, and get a title bump of CTO or something. Or if you think that's too much, get like Senior Architect or something that will look good on your resume for your next job. And ask for a real huge salary bump. If they say they can't do it, or can do it next year (ie putting it off), you'll know they're not serious about keeping you, which means they're already planning on screwing you at some point. As you said, you don't really believe their verbal promises, so bring up a real conversation with real tangible benefits to you and watch carefully how their poker face reacts. It'll tell you a lot.
But to be honest, I would plan to cash out and use your work time to find a different gig in the meantime. Scale back your deliveries and prep for interviews. Your skill level is likely high enough to work at a big named corp with great pay and benefits (ie Google and the like). Larger corps are a lot less likely to rip you off unlike startup founders because they generally have presence in the the country they're operating in and have to follow local laws. Good luck!