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Are you more interested in board advisor, board observer, or board membership?
I've been all 3. Depending how formal the board is being run, the roles are quite different. My guess is a startup will not on the formal end of things.
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Here is a bit of insight into how a few name brand Silicon Valley new venture law firms sometimes approach it. They say (simplified), "OK, we'll do your corporate legal work for you and introduce you to VCs, which in turn jumps you to the front of the line, and because we introduced you, your odds of funding go from 1 in 1000 up to 1 in 20. The rest is on you. We'll send you bills, but don't bother to pay them. We'll take a board seat. We'll take some equity.
If, somewhere down the line, there is a liquidity event (IPO, merger, acquisition, etc), then you'll pay us our unpaid bills plus interest.
Interesting....Do you have a rough percentage on how often it works out like that? (50%?)
So I just spoke with the guy today and it seems they are looking for FT. We ran out of time so I am going to setup more time with them in the coming weeks to discuss further. I was asked comp right away but said I need to know more first.
Given the risk for FT I would ask for about 50k post-tax sign on bonus in exchange for less equity...Thoughts? And what is the average equity that a Sr. leader in the company would ask for? 2%?
How does a <10M startup even have a formal board to begin with?
Isn't that evaluation for a startup something like, you might be around for another 6-18 months? If they last 2 years, then they can come back and get things rolling
Looks like they been around for 6 years. It was originally funded in part by the CEO selling their former start up. No board. So it would be an all or nothing dive in. The guy seemed cool, if they can fit my requirements I may go for it. The sign on bonus would cover me in terms of the risk I feel I'm taking. If they can't give that then I wouldn't do it.
Looks like they been around for 6 years. It was originally funded in part by the CEO selling their former start up. No board. So it would be an all or nothing dive in. The guy seemed cool, if they can fit my requirements I may go for it. The sign on bonus would cover me in terms of the risk I feel I'm taking. If they can't give that then I wouldn't do it.
Guess I don't know how startups work :S how does a 6 year "company" count as startup and not a small business by now? Or is it not profitable without outside money being pumped into it?
Guess I don't know how startups work :S how does a 6 year "company" count as startup and not a small business by now? Or is it not profitable without outside money being pumped into it?
Their annual revenue is good given overhead is only 5 FT employees and virtually no overhead (co-working space). But in thinking today the biz model is not fully recession proof. I think a 6 year old company is beyond "start up" but still relatively new. It's in that awkward pubescent stage I guess...
Either way I am communicating aside from the comp that I need to be a key stakeholder in new projects aside from the one they'd be assigning me to.
I think I will say I'm interested but if they can't give me the comp for FT I can sell them on me doing consulting PT. If they want FT but can't afford it they should get someone with my experience at least PT. A Junior professional can't handle the market challenges they will encounter and meanwhile I can do 2x the work in half the amount of time. Quality costs $$$$$$$
Their annual revenue is good given overhead is only 5 FT employees and virtually no overhead (co-working space). But in thinking today the biz model is not fully recession proof. I think a 6 year old company is beyond "start up" but still relatively new. It's in that awkward pubescent stage I guess...
Either way I am communicating aside from the comp that I need to be a key stakeholder in new projects aside from the one they'd be assigning me to.
I think I will say I'm interested but if they can't give me the comp for FT I can sell them on me doing consulting PT. If they want FT but can't afford it they should get someone with my experience at least PT. A Junior professional can't handle the market challenges they will encounter and meanwhile I can do 2x the work in half the amount of time. Quality costs $$$$$$$
Depending on how your other work schedule is you can offer them a fractional role (COO, CTO, whatever) on a part time basis but with the title and equity (which is based upon your expertise, not hours in the chair.) Base pay would scale.
Depending on how your other work schedule is you can offer them a fractional role (COO, CTO, whatever) on a part time basis but with the title and equity (which is based upon your expertise, not hours in the chair.) Base pay would scale.
I am open to fractional role. For example if they give me 1% equity and 25k a year for PT at 5 hours a week (on average) then I'd be inclined to accept. We'll see what happens in the next discussion. I'd like it to be more informal and negotiable but if they lean more towards rigid on FT the deal is probably off.
Remember <$10M is not that much money for NYC, so there is a huge risk of them going belly up when they run out of money, putting you out of work. They COULD get more funding but that is a huge risk. When the next recession comes (and it is right around the corner) - that start up is doomed and funding gets harder to get.
Remember <$10M is not that much money for NYC, so there is a huge risk of them going belly up when they run out of money, putting you out of work. They COULD get more funding but that is a huge risk. When the next recession comes (and it is right around the corner) - that start up is doomed and funding gets harder to get.
Agreed. The founder got 50M from selling an old company and used part of that to fund this one. But I highly doubt it will be used to keep the new one afloat in the event of a market downturn.
I am open to fractional role. For example if they give me 1% equity and 25k a year for PT at 5 hours a week (on average) then I'd be inclined to accept. We'll see what happens in the next discussion. I'd like it to be more informal and negotiable but if they lean more towards rigid on FT the deal is probably off.
Since you said you can do twice the work in half the time of a less experienced person, your five hours would take them 10-15 hours? That puts your evaluation at $200k+ for the job at $25k/5 hours of work a week.
Maybe you make $200k at your current job, but does a startup need that much from you for that cost? I mean you may value yourself that much, but if they only need certain parts of your skills, seems like you are pricing yourself as a whole and not for the parts they need. Does it matter if you can do XYZ if they only want to hire you for X but you keep price the same for XYZ? Sounds like they would do better to contract out for X only and save some money.
Not sure about the fixation on a 50k sign-on bonus? It seems like it would be chump change to you in NYC considering the value you feel you bring to this elderly ‘startup’, and I don’t see any reason to believe they are actually interested in offering this bonus anyway. Plus you are looking for a board advisory position at a company without a board or indeed any corporate structure at all? Add to that the very slight chance that a 6 year old company personally financed by a millionaire is even INTERESTED in giving up equity for your services, and I’m not sure this is a good fit for you.
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