Compesation at a Start Up - Tied to Founders Schedule

I'm not sure there are cut-and-dried answers to any of those questions - but here are my general views.

i. Vesting schedules and external investment

On the structure the founders have agreed, the question is - does it make sense? If it does, then let it stand. If it doesn't, and you and they believe that your joining the team is a big step forward, then discuss that frankly.

If there's an external investment, it's inevitable that a whole lot of things change. Usually, I'd say that's beneficial for the early stage team - because it's usually tidier all round to (for instance) bring forward the vesting schedule.

ii. Founders' Equity

If you're critical to the success of the project, I'd say that should be recognised in the class of equity you're offered. So yes, you should ask. And if the answer is 'no,' take professional advice about what the junior class gives and doesn't give you. What's it worth in the compensation package overall?

iii. Taking a %age of funds raised

If the purpose of raising funds is to invest in the project to which you're going to be committed, I'd say 'no.' It's a team challenge, and your value to the team should be picked up in your compensation package.

If the purpose of raising funds includes the founders taking cash out of the business, then it's a qualified 'yes.' If you're making that event possible for them, taking a percentage is a simple way of avoiding some very complicated negotiations!

And if the primary purpose of hiring you is to enable funds to be raised, then again I'd say 'yes.' If they hired you just to raise the money, that's how you'd be remunerated.

iv. Termination clause

One issue you often find here is the 'good leaver/bad leaver' question being tied up with whether vesting gets accelerated, held or cancelled. Again, look at the overall shape - what classes of equity are defined and offered, how it vests and what the thinking is behind that. In case of termination, you are clearly looking to protect your interests. And if it's not clear, take specialist legal advice. I've met too many people who've negotiated what seemed to be good termination terms but have found themselves disadvantaged. When that happens around a success - for instance, a big investment round or an exit - it can be pretty damaging. It's uncomfortable thinking these things through when you're getting excited about the venture, but far better to sort it out up front!

Most of these questions depend on when in the company's cycle you're joining. Was the company launched last month, and you're the first hire, or have the founders gone for months without pay, and finally raised some money and you're the third person they've hired?

1. Is it fair to ask to be tied to the founders vesting schedule - exit, cliffs, termination, vesting, etc irrespective of whether investment is raised internally or externally? Does external investment change anything?

Have you taken the same risks as they have?

1. Is it okay to ask for undiluted or founders equity?

I'm not familiar with this term. Usually there's common and preferred. You'd need to clarify.

1. Is it fair to ask for a certain % on investment raised? They will be able to raise more cause of me.

I'm inclined to say no on this one. You're now part of the team, and your job is to help the company in any way that you can. Since you're getting a commission, I'm guessing that you're the VP of sales, though you could be the biz dev person. Either way, I'd say it's part of your job to help the company getting investment.

1. What is the best termination clause? Severance and Notice are standard but what would be the accelerated vesting associated with it? Can this be tied into the founder structure?

Definitely depends on what stage of the company you are joining .If I were you ,and the product is developed already and ready to go to market stage I would not ask for founders equity , founders have already taken the risk ..