Help me write my start up contract

April 26, 2013 5:50 PM

A local web start up asked me to help start their web based business. I would be employee number 1. The venture is being funded by the founder who is a successful entrepreneur.

I have only ever worked for very large Fortune 500 companies so this is uncharted territory for me. My general work experience involved very structure contracts with incentive plans laid out front.

The job offer gives me a sizeable pay raise, about 15%. The rest of the contract is up for me to determine.

So far I have requested:
18 days vacation
unlimited sick days
9 holidays
4 personal days

In terms of an equity plan or bonus, the founder said he is up to either. I am leaning towards a bonus in case I dont stay long enough to become vested. I am thinking of a 12-15% yearly bonus that would be paid out twice a yr. So 6-7.5% paid out every six months. A small equity option would be offered after the first yr of service.

Does this sound inline with a start up contract? I live in the northeast if that is helps.

Am I missing anything ?

posted by burlsube to Work & Money (5 answers total)

Things I wish I had thought of when I was in a similar position:

1. Negotiating for a certain amount of work-from-home time, separate from personal/vacation days. Whether that's one day a week or month is up to you, but worth mentioning.

2. Equipment. You should be using separate computers for personal and work anyway, and it makes sense for them to purchase your work computer.

-

I'm not sure about the equity/bonus situation, but it seems weird to me. I'd be a little concerned that my lack of interest in equity would worry the founder. I would think they would want someone who is just as convinced of the big payout at the end of the road as them.
posted by ejfox at 6:27 PM on April 26, 2013

What criteria is used to determine the bonus? If the company lost money in a given year, would you still get a bonus? What happens when the cash starts to run out?

I also didn't see any mention of health insurance. Are you self-insuring?
posted by JoeZydeco at 8:05 PM on April 26, 2013

In a realistic deal you'd be co-founder, not first employee. You'd get n% of the company from the get go, not slowly vesting options.
posted by w0mbat at 9:54 AM on April 27, 2013

Also, all of these days off would really be a red flag to me as the founder of the startup. Startups don't work like that. The fact that you list that first, and that you demand more than is standard (at least in the US, where two weeks is normal if inadequate), would really worry me. I wouldn't do the deal.
posted by 3491again at 1:51 PM on April 27, 2013 [1 favorite]

Response by poster: Interesting... The days off are pretty standard issue in the Northeast area. But point taken. Maybe it is time to re evaluate the offer and my commitment to it.
posted by burlsube at 4:57 PM on April 27, 2013