Over the past ten months, I've been working with a startup in a technical capacity as a contractor. Prior to my joining, they had a rocky start and spun their wheels for a while with an outsourcing companies. I put together an internal team, and we revamped the website, rebuilt the technology from scratch, and constructed mobile applications.
As a direct result of this work, the company was able to raise a large funding round, and was featured in TechCrunch and mainstream press. Since then, the bleeding has stopped and the company is close to cash-flow positive; it will be in the black in six weeks if the current eight-month trend continues. It would not be an exaggeration to say that I rescued the company from the brink of bankruptcy and more or less turned it around.
The CEO has asked me several times to consider dropping my contracting business and working with them full time. I have considered this seriously, as she is a great leader. I also have a great rapport and team relationship with the other corporate members and the technology team I built.
On Sunday, she made a formal offer:
- $60,000 in salary (this is equal to her own salary)
- common stock options equal to about 1.5% of the company, vesting quarterly over 4 years, vests immediately on acquisition
- no benefits
This offer was verbal. In the same conversation she acknowledged that the salary was low, but that she wanted to wait until our financial footing was more stable before we put officer salaries in line with the value people were contributing (i.e. six figures or more). She also described creating an additional options pool to provide awards from on a periodic basis (this would require board approval and doesn't exist yet). Nothing is in writing yet.
I have greatly enjoyed the work, and I think there is a reasonable chance that the company to be acquired within the next, say, 5 years. I'm now trying to decide if this is a good offer or not.
In my opinion, the offer is too low for someone who had an instrumental role in turning the company around. If the company sold for, let's say, $100MM, then I would receive $1.5MM, but there is only a modest chance this will occur. But if I worked 2,000 hours per year at my $200/hr rate, I would make $1.6MM, guaranteed. That seems like reason enough to reject this offer.
So, overall, I don't think this compensation package is enough and I am considering asking for more -- at least 4% of the company, possibly with anti-dilution provisions. Other than simply asking for more options directly, are there any suggestions you'd have that would make the CEO more likely to accept a counteroffer?
