Have I been fooled by joining this startup?
August 1, 2022 4:36 PM Subscribe
I'm trying to understand if this rather stressful pseudo co-founder situation I let myself into is fixable, or if I need to move on.
I had been working independently for many years with clients of my own. I knew this guy (let's call him John) for some time, from his work at a major company in the same sector for some time. He then left his job to set up his own business in 2020 - and even managed to raise funding from his business contacts a year or so after launching. John used to see people talking about my projects and would often ask me when I would work for him, and one day I answered that I would, but as a co-founder and not as an employee.
A few months later, I ended my previous contract and we started talking a bit more seriously, he offered a monthly salary that is way lower than I am worth in the market, plus a low single digit percentage in the company and a percentage (to be defined) of any commercial deals. When I started, I wanted to openly tell people that I was a partner, but he told me to hold off on that until he sorted out the stock options plan. We agreed on things in November and I started working in December, and to this day I am yet to see that plan and to find out what I am meant to be getting if I bring any deals in.
So he told me the stock options/vesting plan (which was done by another startup specializing in that sort of plan) would be done by June. John then took a couple of weeks holiday and didn't even provide an update on said plan and pretty much left me to run the business without even knowing the status of the whole thing. It was only after he returned that he sent me the document, and told me that if I had any questions, I should talk to the guys who put it together. I feel that presenting this document 7 months after I joined is disrespectful to say the least -- and even though he came up with it I am not even sure whether I should go ahead with the whole thing anyway.
I have also noticed a number of things in John's professional behavior that are, ummm... unprofessional. He is constantly late for meetings, and often in conversations with people outside of the company he comes up with things we should have discussed, or that he should have shared with me previously. Meanwhile, I have supported the business in a number of ways beyond the daily job, have contributed with my social capital, reputation and ideas, but John has never told the world I am his partner, co-founder of whatever, or treated me as such internally, or even paid me accordingly. We did a major event and he didn't mention my role to the audience at any point, and he never arranged a meeting to introduce me to the investors. I keep thinking this must be down to the fact that he doesn't want to share the spotlight, he is an extremely inexperienced entrepreneur, or both. Plus it seems to me that he wanted an employee, not a co-founder/partner.
I have told John how I feel a few times and he always tends to minimize my concerns, saying the soon everything will be sorted and whatnot. I feel like I am going out with a married man who doesn't want to be seen with his lover. I often wonder if I made a seriously bad decision joining this company despite the fact I love my job and working with the team. I still have some of my own gigs at the moment and a masters degree to finish, so I am thinking of whether I should just quite this pseudo entrepreneur thing and just go back to freelancing. On the other hand, I feel the way this has been handled left me with serious doubts about the direction my career is headed and I also ask myself if I haven't tried hard enough :(
Beyond deciding whether I should stay or not, another thing that concerns me is that my professional moves are reasonably public and if I leave, being a woman and John being the founder of the business, it will inevitably look like I am the one who failed. I have no idea of what the public discourse should be (on places like LinkedIn and in conversations with mutual business contacts) should be in case I decide to quit.
In summary, I wondered what the hive mind thinks about the following - is this fixable or not? What are are acceptable terms to be considered as a co-founder of a startup (re percentage, vesting structures etc)? And if I decide this is not for me, how should this be communicated to the outside world and to the team - I wouldn't want to ruin things for them, since they are in it as employees and are very happy as such.
Thanks for reading this!
I had been working independently for many years with clients of my own. I knew this guy (let's call him John) for some time, from his work at a major company in the same sector for some time. He then left his job to set up his own business in 2020 - and even managed to raise funding from his business contacts a year or so after launching. John used to see people talking about my projects and would often ask me when I would work for him, and one day I answered that I would, but as a co-founder and not as an employee.
A few months later, I ended my previous contract and we started talking a bit more seriously, he offered a monthly salary that is way lower than I am worth in the market, plus a low single digit percentage in the company and a percentage (to be defined) of any commercial deals. When I started, I wanted to openly tell people that I was a partner, but he told me to hold off on that until he sorted out the stock options plan. We agreed on things in November and I started working in December, and to this day I am yet to see that plan and to find out what I am meant to be getting if I bring any deals in.
So he told me the stock options/vesting plan (which was done by another startup specializing in that sort of plan) would be done by June. John then took a couple of weeks holiday and didn't even provide an update on said plan and pretty much left me to run the business without even knowing the status of the whole thing. It was only after he returned that he sent me the document, and told me that if I had any questions, I should talk to the guys who put it together. I feel that presenting this document 7 months after I joined is disrespectful to say the least -- and even though he came up with it I am not even sure whether I should go ahead with the whole thing anyway.
I have also noticed a number of things in John's professional behavior that are, ummm... unprofessional. He is constantly late for meetings, and often in conversations with people outside of the company he comes up with things we should have discussed, or that he should have shared with me previously. Meanwhile, I have supported the business in a number of ways beyond the daily job, have contributed with my social capital, reputation and ideas, but John has never told the world I am his partner, co-founder of whatever, or treated me as such internally, or even paid me accordingly. We did a major event and he didn't mention my role to the audience at any point, and he never arranged a meeting to introduce me to the investors. I keep thinking this must be down to the fact that he doesn't want to share the spotlight, he is an extremely inexperienced entrepreneur, or both. Plus it seems to me that he wanted an employee, not a co-founder/partner.
I have told John how I feel a few times and he always tends to minimize my concerns, saying the soon everything will be sorted and whatnot. I feel like I am going out with a married man who doesn't want to be seen with his lover. I often wonder if I made a seriously bad decision joining this company despite the fact I love my job and working with the team. I still have some of my own gigs at the moment and a masters degree to finish, so I am thinking of whether I should just quite this pseudo entrepreneur thing and just go back to freelancing. On the other hand, I feel the way this has been handled left me with serious doubts about the direction my career is headed and I also ask myself if I haven't tried hard enough :(
Beyond deciding whether I should stay or not, another thing that concerns me is that my professional moves are reasonably public and if I leave, being a woman and John being the founder of the business, it will inevitably look like I am the one who failed. I have no idea of what the public discourse should be (on places like LinkedIn and in conversations with mutual business contacts) should be in case I decide to quit.
In summary, I wondered what the hive mind thinks about the following - is this fixable or not? What are are acceptable terms to be considered as a co-founder of a startup (re percentage, vesting structures etc)? And if I decide this is not for me, how should this be communicated to the outside world and to the team - I wouldn't want to ruin things for them, since they are in it as employees and are very happy as such.
Thanks for reading this!
The failure to mention (and highlight) your role at the major event would mean I'm outta there, but I'm unclear on your role in bringing over team members with you.
Just spend a few hundred dollars setting up your own LLC, change your status on Linkedin to reference that new LLC, send emails to your best contacts.
posted by at at 4:52 PM on August 1, 2022 [3 favorites]
Just spend a few hundred dollars setting up your own LLC, change your status on Linkedin to reference that new LLC, send emails to your best contacts.
posted by at at 4:52 PM on August 1, 2022 [3 favorites]
You joined as "co-founder" without agreeing on the terms of the equity?? Well, what are the terms that he finally gave you in the document? Are you now referring to yourself as co-founder, or is he still asking you to wait?
If you are not, I would definitely start referring to yourself as co-founder, in meetings, on your resume and in your emails. If he is not okay with that, then you have your answer.
How large is the team? How much has it grown since you joined? Have you been operating as co-founder and running the startup? How screwed would they be without you?
posted by aaabbbccc at 4:55 PM on August 1, 2022 [5 favorites]
If you are not, I would definitely start referring to yourself as co-founder, in meetings, on your resume and in your emails. If he is not okay with that, then you have your answer.
How large is the team? How much has it grown since you joined? Have you been operating as co-founder and running the startup? How screwed would they be without you?
posted by aaabbbccc at 4:55 PM on August 1, 2022 [5 favorites]
he never arranged a meeting to introduce me to the investors.
How can this possibly be squared with any serious intent to involve you as a co-founder?!
What would happen if you called the investors today and introduced yourself as the co-founder?
posted by fingersandtoes at 5:26 PM on August 1, 2022 [3 favorites]
How can this possibly be squared with any serious intent to involve you as a co-founder?!
What would happen if you called the investors today and introduced yourself as the co-founder?
posted by fingersandtoes at 5:26 PM on August 1, 2022 [3 favorites]
Sorry to break it to you, but monthly salary, single digit equity, and no title? You’re in it as an employee too. So, communicate to them however you would ordinarily communicate leaving a job to your co-workers.
posted by kevinbelt at 5:28 PM on August 1, 2022 [29 favorites]
posted by kevinbelt at 5:28 PM on August 1, 2022 [29 favorites]
Best answer: I am a founder. 50%/50% split amongst cofounders is not that common, actually - especially if you joined after some amount of time.
But single digit equity is tough. And his behavior sounds really unprofessional from you described. I would get out of there, ASAP.
To get equity for the amount you worked, I would ensure that you were granted options from the day that you started. Unfortunately, if you signed something that has typical vesting schedule it would mean you may have a year cliff.
I would talk to a lawyer before you make any moves, personally. But I would also do a judgement/trade off to figure out if this is worth your headache and if the company will be valuable. From the sound of your description of the CEO, it doesn't seem like a bright future and it may be a walk away situation - but consult a lawyer first.
posted by treetop89 at 5:32 PM on August 1, 2022 [3 favorites]
But single digit equity is tough. And his behavior sounds really unprofessional from you described. I would get out of there, ASAP.
To get equity for the amount you worked, I would ensure that you were granted options from the day that you started. Unfortunately, if you signed something that has typical vesting schedule it would mean you may have a year cliff.
I would talk to a lawyer before you make any moves, personally. But I would also do a judgement/trade off to figure out if this is worth your headache and if the company will be valuable. From the sound of your description of the CEO, it doesn't seem like a bright future and it may be a walk away situation - but consult a lawyer first.
posted by treetop89 at 5:32 PM on August 1, 2022 [3 favorites]
Stick with it if you believe in the product or service.
* John has raised the funds and given you a good team.
* Single-digit equity and a low salary isn't too out of the ordinary early on.
* Seven months to paper a deal is pretty long but not inherently inoffensive.
* Lead founders who are erratic and impulsive and swing from oversharing to secretive ... well that's most of them, right?
Do some things that should make you feel better:
* Get a lawyer and email John and say "Hey, we need to get my deal fully papered. I am targeting September 30. I'm so busy that lawyer X copied here is going to be handling it."
* Get the title you want in the contract.
* Put a salary MFN in your contract. A co-founder with a relatively small stake should have the highest salary in the organization. If engineers making $250k start being hired, you should get $250k or more.
posted by MattD at 6:11 PM on August 1, 2022 [8 favorites]
* John has raised the funds and given you a good team.
* Single-digit equity and a low salary isn't too out of the ordinary early on.
* Seven months to paper a deal is pretty long but not inherently inoffensive.
* Lead founders who are erratic and impulsive and swing from oversharing to secretive ... well that's most of them, right?
Do some things that should make you feel better:
* Get a lawyer and email John and say "Hey, we need to get my deal fully papered. I am targeting September 30. I'm so busy that lawyer X copied here is going to be handling it."
* Get the title you want in the contract.
* Put a salary MFN in your contract. A co-founder with a relatively small stake should have the highest salary in the organization. If engineers making $250k start being hired, you should get $250k or more.
posted by MattD at 6:11 PM on August 1, 2022 [8 favorites]
I would come up with a list of things you need/want in order to stay. If he meets those terms, stay. If not, AMF out.
Fwiw, I think there are two parts to this. One is the compensation. Two is the title thing. It sounds like you are still early in your career if you are finishing up grad school. It also sounds like the title, partner, and the like is more important than the money. If the money is really good, who cares what they call you, but if it is so so, fight for the title and the announcement, etc. It will help you get your next gig.
posted by JohnnyGunn at 6:11 PM on August 1, 2022 [1 favorite]
Fwiw, I think there are two parts to this. One is the compensation. Two is the title thing. It sounds like you are still early in your career if you are finishing up grad school. It also sounds like the title, partner, and the like is more important than the money. If the money is really good, who cares what they call you, but if it is so so, fight for the title and the announcement, etc. It will help you get your next gig.
posted by JohnnyGunn at 6:11 PM on August 1, 2022 [1 favorite]
When someone shows you who they are, believe them.
Could be a very well intentioned guy, but he’s not someone to follow and he certainly doesn’t see you as a partner.
posted by Tell Me No Lies at 6:16 PM on August 1, 2022 [2 favorites]
Could be a very well intentioned guy, but he’s not someone to follow and he certainly doesn’t see you as a partner.
posted by Tell Me No Lies at 6:16 PM on August 1, 2022 [2 favorites]
Best answer: Part of me is of the mind to go with the guidance above to start publicly asserting your role as co-founder. Is your understanding that your role is to be a leader? If yes -- and if John's given no guidance either way -- then you have tacit acceptance to assert yourself as you see fit. Leaders are expected to lead without waiting for permission. Leaders in startups are hardly ever expected to ask for forgiveness, let alone permission. Even if your role is not explicitly a leadership role, it's always great to practice assertiveness, and there's no better place than a startup to try shit and not have to worry about what happens if it doesn't sail. That's one of the things startups are for. Future awesome You is built from the failings of current tryingstuff You.
On the other hand I wonder if the path you choose to take should be informed by whether or not you have anything (at all) in writing/email that confirms your stipulation of being a co-founder was accepted. Even if casually, informally, or "in theory". "In this IM thread from before I left my last employer, I told John I want to be cofounder, and he said 'Sure longjump, I just want you to come on board!' " The purpose of this is to give you some cover (optically) if things go sideways. In the event that John had been making a conscious effort to never state in writing/typing that you're a co-founder, then he'll have plausible deniability if it turns out that your public assertions are not welcomed by him. However, if you have the ability to show that he ever did assert it writing/typing, then you have cover, and potentially some leverage. To be clear, I am not suggesting that any of that has any legal standing whatsover. But it could be useful nonetheless to support the path you may want to take from here.
Also I like the suggestion of reaching out to the investors. Of course a co-founder would want to meet and know more about the investors, and if they've put money into the business why wouldn't they want to hear from a co-fonder? "Yeah, i'm the one who ran the show when John was out on vacay. I was glad when he returned, but really enjoyed the challenge of steering the ship on my own for a bit." You could learn alot about the investor. Maybe you learn that they are John-like. Maybe you learn that they are surprised to find out there's a cofounder. But there's another angle: in the event that John has been as vague and handwavey with an investor as he has been with you, the investor may find it interesting and valuable to learn of something 'new' and different from what s/he has been told. I'm not suggesting to go to them with the aim to rat John out ; you want to make him look good. But play it straight and sincere with them ("I'm sure John has already told you about me, I'm his co-founder, and I just wanted to connect with you and learn more about your interest in the work we're doing at StartupX."). If they happen to already have questions or concerns about John's general inconsistency, or have also wondered about his unprofessional behavior, then they would value this opportunity to interact with you as informative, and perhaps make them glad there's another adult over at the company they're putting their money into. Also, it might be the start of a relationship/networking-connection with the investor that could serve you well in the future well past StartupX's existence.
I hope we hear how it works out. Good luck!
posted by armoir from antproof case at 7:11 PM on August 1, 2022 [1 favorite]
On the other hand I wonder if the path you choose to take should be informed by whether or not you have anything (at all) in writing/email that confirms your stipulation of being a co-founder was accepted. Even if casually, informally, or "in theory". "In this IM thread from before I left my last employer, I told John I want to be cofounder, and he said 'Sure longjump, I just want you to come on board!' " The purpose of this is to give you some cover (optically) if things go sideways. In the event that John had been making a conscious effort to never state in writing/typing that you're a co-founder, then he'll have plausible deniability if it turns out that your public assertions are not welcomed by him. However, if you have the ability to show that he ever did assert it writing/typing, then you have cover, and potentially some leverage. To be clear, I am not suggesting that any of that has any legal standing whatsover. But it could be useful nonetheless to support the path you may want to take from here.
Also I like the suggestion of reaching out to the investors. Of course a co-founder would want to meet and know more about the investors, and if they've put money into the business why wouldn't they want to hear from a co-fonder? "Yeah, i'm the one who ran the show when John was out on vacay. I was glad when he returned, but really enjoyed the challenge of steering the ship on my own for a bit." You could learn alot about the investor. Maybe you learn that they are John-like. Maybe you learn that they are surprised to find out there's a cofounder. But there's another angle: in the event that John has been as vague and handwavey with an investor as he has been with you, the investor may find it interesting and valuable to learn of something 'new' and different from what s/he has been told. I'm not suggesting to go to them with the aim to rat John out ; you want to make him look good. But play it straight and sincere with them ("I'm sure John has already told you about me, I'm his co-founder, and I just wanted to connect with you and learn more about your interest in the work we're doing at StartupX."). If they happen to already have questions or concerns about John's general inconsistency, or have also wondered about his unprofessional behavior, then they would value this opportunity to interact with you as informative, and perhaps make them glad there's another adult over at the company they're putting their money into. Also, it might be the start of a relationship/networking-connection with the investor that could serve you well in the future well past StartupX's existence.
I hope we hear how it works out. Good luck!
posted by armoir from antproof case at 7:11 PM on August 1, 2022 [1 favorite]
Best answer: Also,
I feel the way this has been handled left me with serious doubts about the direction my career is headed and I also ask myself if I haven't tried hard enough :(
Please don't judge yourself harshly based on anything that has resulted because of the maneuverings of some entrepreneur bro. The situation you've found yourself in is a ripe opportunity to learn so many things that will suit you later in your career. At some point in the future you will be a boss at dealing with the kinds of challenges you're faced with now, and it's because you faced those challenges now. Even if you decide to walk away from John's Startup, you'll know a lot more than when you went in.
posted by armoir from antproof case at 7:21 PM on August 1, 2022 [2 favorites]
I feel the way this has been handled left me with serious doubts about the direction my career is headed and I also ask myself if I haven't tried hard enough :(
Please don't judge yourself harshly based on anything that has resulted because of the maneuverings of some entrepreneur bro. The situation you've found yourself in is a ripe opportunity to learn so many things that will suit you later in your career. At some point in the future you will be a boss at dealing with the kinds of challenges you're faced with now, and it's because you faced those challenges now. Even if you decide to walk away from John's Startup, you'll know a lot more than when you went in.
posted by armoir from antproof case at 7:21 PM on August 1, 2022 [2 favorites]
Large caveat. I have no experience in the start-up world. But what was in the contract that you signed? Because whatever you signed is the job you have and It seems to me that you are an employee not a partner and nowhere close to being a co-founder. If you're not happy with your current title, role, and compensation, you should find something more appealing to you and quit. I wouldn't sweat at all what people will think- people leave jobs all the time for all sorts of reasons and leaving because you're underpaid is a common one. You can go with a "so proud of what we've achieved but looking forward to new opportunities".
posted by emd3737 at 7:32 PM on August 1, 2022 [4 favorites]
posted by emd3737 at 7:32 PM on August 1, 2022 [4 favorites]
No matter how well you get this present collection of issues fixed, you will always have a kernel of distrust humming in the back of your head.
Get.
Out.
posted by Thorzdad at 8:01 PM on August 1, 2022 [1 favorite]
Get.
Out.
posted by Thorzdad at 8:01 PM on August 1, 2022 [1 favorite]
I just noticed the sexism tag and from your posting history it looks like you may be female. That changes things (not for the better I’m afraid.)
1) As per this situation, having a female cofounder could be a negative when trying to get people to give a startup money. John may be trying to keep your presence from disrupting the old boy’s club money train.
2) … but if that’s a compromise he’s having to make then John and you would have had a down-to-earth talk about the situation a long time ago. I’m afraid that right now this fits a more common pattern of stringing people (particularly women) along and then having a pretty little legal maneuver at the end that leaves them out in the cold. The old boy’s club respects that sort of thing.
Particularly if you are female I urge you to stop what you’re doing and get everything clarified in writing. Not only what your job duties are, but the renumeration you expect in money, job title, and recognition. Putting some months in at a startup while things are up in the air is common, but they have to come down sometime and I think in your case sooner would be better.
Openly give John a week to commit — if it’s not an immediate crisis he’s likely to ignore things — and for yourself another week of leeway. If he won’t get it together by then it’s probably time to move on.
posted by Tell Me No Lies at 8:31 PM on August 1, 2022 [3 favorites]
1) As per this situation, having a female cofounder could be a negative when trying to get people to give a startup money. John may be trying to keep your presence from disrupting the old boy’s club money train.
2) … but if that’s a compromise he’s having to make then John and you would have had a down-to-earth talk about the situation a long time ago. I’m afraid that right now this fits a more common pattern of stringing people (particularly women) along and then having a pretty little legal maneuver at the end that leaves them out in the cold. The old boy’s club respects that sort of thing.
Particularly if you are female I urge you to stop what you’re doing and get everything clarified in writing. Not only what your job duties are, but the renumeration you expect in money, job title, and recognition. Putting some months in at a startup while things are up in the air is common, but they have to come down sometime and I think in your case sooner would be better.
Openly give John a week to commit — if it’s not an immediate crisis he’s likely to ignore things — and for yourself another week of leeway. If he won’t get it together by then it’s probably time to move on.
posted by Tell Me No Lies at 8:31 PM on August 1, 2022 [3 favorites]
He sounds like a shit heel who makes you feel disrespected and do a disproportionate amount of work while he jets off leaving you in the lurch. Fuck all of that. You don’t need to carry water for him and spend your social capital just because he’s willing to underpay you and give you a token stake. Seven months is nothing, bounce this guy and his stupid gig.
posted by Bottlecap at 10:21 PM on August 1, 2022 [4 favorites]
posted by Bottlecap at 10:21 PM on August 1, 2022 [4 favorites]
There are more than a few red flags here. SOME of them may be explained by he's busy doing ****, but some of it can only be explained by IMPLYING you have a title, but no actual pay or status to go with it.
I have to ask... Other than his verbal promise is there ANY physical proof that you are a partner in this company, even if it's "small stakes"? Because this could be VERY problematic for you if you two were to... break up. If he's to deny EVERYTHING, and may go as far as accusing you of falsely representing yourself as partner or founder, do you have a leg to stand on, so to speak?
Obviously you've spent a lot of effort and time on this company. But what's to stop him from dumping you (like a hot potato) the moment you started pushing back?
As far as I know, partner is only valid in a partnership. Founder has no business definition. and is not a part of corporate structure, unless written into the company's bylaws or whatever. I'd be more interested in know what REAL power you have in the company, as well as on paper.
posted by kschang at 1:29 PM on August 2, 2022 [1 favorite]
I have to ask... Other than his verbal promise is there ANY physical proof that you are a partner in this company, even if it's "small stakes"? Because this could be VERY problematic for you if you two were to... break up. If he's to deny EVERYTHING, and may go as far as accusing you of falsely representing yourself as partner or founder, do you have a leg to stand on, so to speak?
Obviously you've spent a lot of effort and time on this company. But what's to stop him from dumping you (like a hot potato) the moment you started pushing back?
As far as I know, partner is only valid in a partnership. Founder has no business definition. and is not a part of corporate structure, unless written into the company's bylaws or whatever. I'd be more interested in know what REAL power you have in the company, as well as on paper.
posted by kschang at 1:29 PM on August 2, 2022 [1 favorite]
This thread is closed to new comments.
posted by DirtyOldTown at 4:40 PM on August 1, 2022 [22 favorites]