Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 2 down vote favorite

I am CTO of a startup with an annual salary of 155.5K which just turned profitable and have been doing fairly nice and is backed by investors. I don't have any equity with this company yet. Two of my old friends just started a new company with an idea. They don't have any product and want me to come, join as a CTO and execute their idea. They have few vc's to invest in their idea as well. They offered me 175K + 7% equity. I want to know if the equity share is fair with the risk I am taking to join an early stage startup by leaving my current company which just turned profitable. Thanks

share|improve this question
You were a CTO in a preprofitable startup. I'd be out of there in a heartbeat without equity. Don't waste your talent. – ShiggityShiggityShwa Feb 22 at 19:15

4 Answers

up vote 5 down vote

Yes, 7% is fair, given that you will have a very generous based compensation as well.

I'm not sure what the risk is. You sound like the kind of person who could find another CTO job in 10 minutes, so the absolute worst case scenario is that the new company fails and you have to spend 10 minutes getting a new job.

share|improve this answer
Pre-product startup CTO jobs that pay 175K are rare. There are tons of sub-50K / equity only ones out there - which in reality are a lead developer role and CTO in title only. – jimg Feb 18 at 20:06
up vote 1 down vote

A 13% increase in pay and a 7% ownership stake? I'd take that in a heartbeat! (assuming you feel you'd fit well with the team and like their idea) Your risk is pretty minimal, and it's not like you'll have to lower your standard of living to take this job. Just put that extra money in the bank in case the company folds. Like Joel said, it doesn't sound like it'd take you long at all to get another job.

share|improve this answer
up vote 0 down vote

7% is reasonable. Are you getting restricted stock or options?

Be sure to have any vesting be accelerated upon change of control, and buyback at fair market value (not at cost) if you leave the company.

share|improve this answer
up vote 0 down vote

Does your friend's idea excite you? If it does, this seems like a no-brainer.

If not, you might be going from "enough money and happy" to "enough money and unhappy"...

You may be able to use the 175K+7% offer, to get a better deal/equity at your current company. If they offered you more, would you find yourself even more reluctant to leave?

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.