Share offer of a US company for non-US resident


2

As a small team of 2 developers, we have done a good job on developing the work of a client, which is now becoming a startup and founding a LLC, they want to give us a 10% equity of the company. In return we will be the technical aspect of this company (indeed we get a portion of money as a salary).

My question is, this LLC company will be a US company while we are living in an European country. To us, as a small software company of two young software engineers, how shall we handle this offer and what are the important points that we should give attention so that we make sure this is a fair offer to us.

Thanks

CTO LLC Foreign

asked Jan 2 '12 at 10:44
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Hellnar
116 points

1 Answer


1

You say they want to "give" you 10% of the equity. Is it truly a gift or do they expect something in exchange? If you are giving something up then it is not a gift.

If it is a gift, take it.

If you are giving something in exchange for equity then my advise is not to focus on who get what percentage, worry about who gets the money instead.

Since they are keeping over 50% then clearly they can outvote you on any question. You will effectively have no say in a stockholders meeting. Therefore make sure that you are guaranteed enough money to compensate you for what you are giving up.

answered Jan 2 '12 at 12:45
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Jonny Boats
4,848 points

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CTO LLC Foreign