I'm interviewing for a Lead Developer role in a company that is asking me to take a cut in salary in exchange for a share of equity over 3 year period.
I'm not necessarily opposed to the idea, but I know precious little about the business side of startups, so I'm not sure how to spot if I'm being offered a good deal.
What are the appropriate questions to ask during interviews that can help me understand what the offer is, and the associated risks?
ie., is it appropriate for me to ask detailed questions about the long-term business plan?
Are there some warning signs I should look out for?
Are there some warning signs I should look out for?;) They offering you equity in exchange for a cut in standard rates. Realize most start ups do not work out, and without 5% of equity you do not have a blocking minority. Are you willing to give up the money WITHOUT (!) any return on the shares? Are you willing to make the job with the shares worth 0? That is most likely, and you no way to block any decision they make.
Besides that it is not answerable. Well, it is - a Lead Developer in a startup should be a founder with equal treatment. If they look for a lead as a hire, then they are in tech mess (no technological lead on board) OR realize it is over their head likely (messy codebase, bad practices). If you are lucky they got money and are funded and the investors want better quality. Then I personally would gladly take an equity share - ON TOP of my regular market rate salary.
Find out where the money is coming from currently and in the future. What is the company worth right now?
Once you're made an offer, ask for legal documents to have them reviewed by a lawyer before sigining. Like you said, this is new to you.
Any hesitation, concerns or push-back on their part is a red flag.