I recently met with a local start-up and was presented an offer. I spent the last few days reading on this board looking for insight into the start-up financing world. The start-up is technology based and and my role would be the sole programmer to start. The team currently consists of the founder and two people as advisory roles. At this point in time the future funding is reliant upon a proof of concept which I would be building.
Here are the details:
- No salary, but can set something up to receive compensation for time invested upon receiving funding
- 3 year vesting schedule, no shares the first year
- 7,330 shares at the end of the first year
- 22,000 shares total after 3 years
- my rate would be ($75/hr) and shares can be purchased at ($8/share) - (~160/hours) a month * $75/hr ~= 1,500 shares for months worth of labor
The start-up financing world is new to me so Im still trying to learn everything I can. I realize the stock has no value without knowing the total shares outstanding. I was told the company was setup with 10 million shares and that the majority of them will be used for future investors. I have not learned about option pool yet but it sounds as if this offer is for 0.0022% of the company and that every month of labor I would receive 0.00015% of the company.
Can this be right? Or is there something I am missing?