I've read similar questions but like anyone asking a question I think my situation is different.
My background: I've been working full time since 06 and currently work as a Sr. Developer on a small Govt project doing Java/J2EE by the day and have been dabbling into RoR for past 1.5ish years. My salary is between 110-115K (just stating this to avoid false pretenses that I am doing the projects since I don't make enough at day job)
I'm working on two different start ups as the sole developer. In both the projects the person I interact with is in the middle of me and the two founders for the startups. The person is my co-worker at my full time job and started a company 4ish months ago. Both the projects are in very early stages with Alpha release for one about to go out in beginning of June. I've told them my interest in equity if/when the funding rolls in. However, we have not sat down to actually talk about the actual numbers of equity shares and neither have me, founder and the middle person sat down together yet (we plan to). The alpha release for one of the startups going out in June will involve 20-25 people using the app (no money) but with that we'll get good feedback.
I love working on the projects after my full time job and am getting to know stuff on the way as well.
I've heard bad stories from developers regarding working for equity but I want to get an opinion. Whatever steps I take will be after the alpha release and feedback from actual users. Also, all the code is in my private github repository and no paperwork has been signed. What options should I take?
- demand to sit down and talk about equity shares after alpha release?
- see the course of the start ups and stick around until there is funding?
- open my own company and forget equity but just ask for money now (might not be any right now)?
- open my own company and demand for more money (not equity) when there actually is funding?
- if I take the equity route then how much should I be negotiating for?
Please share your opinions from past experiences.
Note that the person in the middle is trustworthy as I know him for about 6 years and worked with him on a project outside work previously as well, which didn't take off ...he didn't gain any money from it but did provided me with $3000. Even though, the $3000 was less than the hourly charge.
Had a meeting yesterday with "middle men" and I am so glad I had that meeting sooner than earlier. Made me face the reality. They said they were going to offer me 5% equity as they had decided with the founder than they would be getting 10% equity. So they would give me half of that. I did not think that was a viable option for me since there were no other developers and NO upfront money whatsoever. The founder has setup the company and has been talking to investors but investors have told him that before funding him, they need to see someone technical with him. So I think he was in need for tech co founders and found these people in the middle. People in the middle tried to say how they've grown from developer level and 'can get it done' either themselves or findsomeone else. At that point I moved away from the conversation and said then go ahead. When I asked whether they will be telling the founder that that is it? they said no, since they've committed, they can't go back on their word and would pursue it in .NET (language they know) along with some other developer. Everything went smoothly. I am a bit disappointed but this has given me bite of reality. I went home and closed the heroku link I had set up for the product.
As a lesson.
Founders need to look at developers as technical co-founders rather than coders. there is a difference in first employee and a developer who works on the first version of the product
Developers, I think our time would be better spent working on our own ideas rather than working for small equity and working like dogs.