Equity equation as 3rd member of a startup


3

I was working for a startup as a remote contractor for couple of months.

The founders of the startups are non technical and I am the only one technical person into the team.

After working with the product from scratch,they offered me of partnership.I dont have much idea about equity and salary staffs.It was true that I am really passionate about the idea,in which we are working on.

My current contract rate is average market hourly rate.How much equity and salary I can expect from the founders.They have solid funding ok 300K and may be next year they will go for series A funding.

They are also thinking of me to relocate,is there any issue of small startup for giving H1B?If any one know details please explain.

Thanks.

Equity Startup Costs Startupvisa

asked Aug 18 '12 at 19:46
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Arnold
16 points

1 Answer


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Regarding the equity question - there is an equity calculator for founders - http://www.foundrs.com/. While it's nice to get an idea about how others view the situation every situation is different.
It sounds like you are late to the game on this one. The more a startup makes progress the lower the risk but also the lower the equity you can get as a member of the team. My guess is that if they already have seed funding they allocated an ESOP plan and will be compensating you from that plan which probably means single digit percentage at best and a quarter percent at worst.
If you had a time machine, a much better point to have this discussion would have been before the seed funding. At that point you could have take a small leap of faith and have much bigger stake at the company.

Regarding the H-1B question, there is no difference between a startup and a real company regarding the relocation options. However, the cost and amount of effort for them to go through that is unjustifiable at this phase. With the funding situation you described, putting myself in their shoes I would have tried to find a way to make this remotely (I founded two companies with the tech team and the biz side being apart until a VC comes in).

answered Oct 12 '12 at 23:20
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Yaniv Nizan
411 points

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