| Topic Name: |
How much should I get? |
| Message Name: |
Get the whole Cap picture |
| Date Posted: |
04/21/2000 |
| In Reply To: |
Ok, here's my scenerio:
I'm working with an internet start-up -- joined them without actual terms, but that I'd be compensated contingent on my role & contribution. I've worked a lot & contributed a lot. Who I've lead them to:
- web developer/design firm
- two art directors
- accountant
- VC with which we are currently in talks of $5 million in funding
In addition, my personal contribution to the mix is my marketing knowledge (currently working at a leading direct marketing agency). I've worked probably
Downfall: I'm only 2 years out of undergrad.
There are five others involved -- their stock options are:
CEO 15%
COO & CTO 10%
Other two 8%
I joined them 6 months into the process, but at a time when they had no funding, no concrete offers. I've been with them for 7 weeks. I've worked 50-65 hours a week. What is fair for them to offer me? And should they view me almost as a founder, or as an employee coming after the fact? |
| Message: |
I think your next job might be to work on the companies capital structure.
The rule of thumb is for the employee option pool to equal aprox. 15% to 20% at a liquidity event such as IPO/trade sale. Dilution from raising outside money will bring the percentages you mentioned closer to this number.
You are in a situation that is basically a negotiation. Here is my advice: "if you don't ask you don't get". As for the actual number there you are in no mans land, anything goes. But whatever number you dream up make sure you talk about the percent on a fully diluted basis after this round of funding. That will be a more tangle number (and it will also sound smaller). You need to lay out a cap table accounting for all shares after the round. This way you know the % of what you are asking for. After you have 15 to 20 people there will/should be set polices for all this.
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