New Business Owner Receives Intriguing Job Offer

21 Comments

1. Melissa MoodyNovember 19,2020 at 6:39PM UTC

   Sounds like a fairly good problem to have, all things considered. I 'll just provide one thought-starter to help you weigh your options: Consider what do you really *need* in terms of salary? I think that if you have growth opportunity with either role, and both offer you room to grow your work experience (in different ways), and both meet your values... Salary becomes a question of: what do you need (read: an actual number) to feel 1. secure and 2. content (not regretful). It's never easy to take a lower-paying role, but if it is "enough" (acc. to your own purposes) you can - to some extent - stop regarding that as a difference between the roles, and can focus on other elements that might refine your choice. Good luck!

2. Lena EvergreenNovember 19,2020 at 8:19PM UTC

   Thank you, Melissa; very insightful and helpful. I most certainly can handle the pay cut for now. And I suppose if finances change for the worse I can request a conversation with the founder.

   Follow up question: do you have any experience with start-up stock option packages? I have a bit of general knowledge but am unsure what is "fair" for a VP position.

3. Melissa MoodyNovember 19,2020 at 10:30PM UTC

   I'm actually *just* going through this process myself, so I would love to see answers on this from many folks. Perhaps we start a thread just on that topic - guidance on how to negotiate equity vs. salary at startups.

4. AnonymousNovember 21,2020 at 2:09PM UTC

   Six years ago, I was in the exact same situation. Major differences were that it was not c-suite, but case worker role, and had promises of growth as the management were all approaching retirement. I began a graduate program that would prepare me for leadership that management of the non-profit knew about and supported (in principle, not financially). Now six years later I am still a case worker having been almost promised management when my manager retired two years ago, and when that didn't come about was given an excuse about how "titles" really weren't that important, because everyone knows who "runs the place," (meaning me.) A pandemic, shelter-in-place order and 2 years later, I have been passed over for management positions four times (three of which I explicitly asked to be considered for) and am now working for a man the age of my son that I trained, who has no degree (I have two masters), and only one year of experience. The writing is on the wall. I love what I do and I love my clients, but can't shake the the notion that all I am to them is a "warm body" when what I really need is recognition of my skills and experience by being placed in a position of leadership and planning.
   While this may not be what you are dealing with, what I can give you from my experience is to look at yourself six years down the road, and if you are still doing the same thing you were when the founders and friends hired you, will you be regretting the decision? If it does or does not work out, what will that do to your relationship with them, and how important is that to you?
   The other aspect is the cut in pay. I moved to something that paid me just enough to get by, but fed my soul. Now my soul is still being fed but nothing else. I still barely make enough to get by, so it is putting me in a mental place that has me bitter and resentful, which is a place I truly do not like being. I have one promising interview that is a bit of a departure from case work, but will feed my intellect.

5. Robin FinnellNovember 21,2020 at 2:21PM UTC

   Wishing you the best. Seems like you need a new fairy godboss.

6. Noreen WhyselNovember 21,2020 at 2:42PM UTC

   They pay is low but you should get stock. Usually for founders it can start around 10% up to 50% depending on the size of the current founding team and the role offered. Since it’s part time it could start lower. Typically, the funds vest over four years at a rate of 25% per year. So you need to put in four years to get the full amount and there will be pressure from investors (and just the nature of startup investment) to keep your share in through the first several rounds before you can sell any part. It’s a commitment to take into consideration. If you are interested, Brad Feld hosts a venture investment course through TechStars and Kaufman Fellows. It’s a good introduction to venture finance and it’s free.

7. Noreen WhyselNovember 21,2020 at 2:47PM UTC

   Another option is to start in an advisory role with an option to join at C level. Advisors earn 0.25 to 1% stock for 5-20 hours per month but some charge an hourly fee. I’m currently advising a startup at 10hr/mo for 0.5%. There is a possibility of joining as COO, not at founder level, in the future. I carried the Interim COO title for a while before they were advised to reduce everyone’s title while they are pre-seed so now I’m just an operations and design advisor.

8. AnonymousNovember 19,2020 at 8:01PM UTC

   The first question is if you will regret not taking the position. If you won't, then you have your answer. From what it sounds like though, you would.

   You might try to negotiate the length of time for the C-suite position. It is not uncommon for a startup to bring in someone to be C-suite for a fixed amount of time to guide it (at least in the silicon valley). So assuming you can afford the salary cut, you could accept with the caveat that after xx amount of time things are reevaluated.

   The other thing to think about, is how this can help your consulting business in the long run. If this startup had the money to afford to pay your consulting cost, it would potentially be one of your customers right? So technically, you would still be doing your passion work, plus if/when you do it well, could become a success story you could then use to help promote and grow your business in the future.

   This is where that time negotiation comes in. Maybe you take the position and instead of growing your LLC during that time, you focus only the customers you currently have. As time goes on, and you get used to the amount of time you have to put towards the startup, you can decide if you have the extra time to expand your LLC while working at the startup. Then once you hit xx time you negotiated, you have a serious discussion with the founder/friend about how you move forward.

   Startup world moves at a completely different pace than the rest of the world (as I'm sure you know). It could be that after xx time they are now making enough money to pay your fees and they become a customer that uses you as a consultant and you can focus 100% on your LLC. It could be that you love being in the C-suite position, but they have the money to hire more people and your responsibilities have decreased and you can focus more on your company. Or maybe it's decided you will part ways and you go on to focus on growing your company full time.

   If you can afford the pay cut and are able to negotiate the duration of the position, there doesn't seem to be any downside in taking the offer (with the information you've provided). In the long run it could even serve to help you grow your company.

9. Carolyn SteinNovember 19,2020 at 10:18PM UTC

   What is your vision for the future?

   To be on the ground-floor of an organization you're fully aligned with in terms of values, and working at a C-level?

   Or to own your own business? If this is the case, can you consult into the start-up rather than be a full-time employee? Perhaps you can take on an advisory position - 10 hours/week - so it doesn't cut into your LLC work as much but you still have the opportunity to be connected with and contribute?

10. Jackie RukaNovember 20,2020 at 4:54PM UTC

    I have been in this position. Start ups are iffy as the success relies on funding and a impeccable product or service. The start up I advised for is still limping along and was taking up too much of time for little monies. I suggest you set parameters for what works for you. You can also have the start up pay you through your EIN of your LLC to fund your business and pay you thru your LLC to better establish your business and build a testimonial with this start up. As an idea. Build a win/win!!

11. JenniferNovember 23,2020 at 4:32PM UTC

    This is a great idea! I would also add, if you consider this position, it is important to note that you need to be transparent on the hours you will be able to work for this start-up, considering the pay and your already full schedule.
    In these kinds of decisions, it is important to put yourself first and your goals.
    Good luck!

12. Linda QuarshieNovember 21,2020 at 1:46PM UTC

    I am an entrepreneurial person who has started and have my own business but also in the corporate world but my business is online sales so it does not need me to be there 100%, my point is that I understand the thrill and excitement of doing your own thing so let me speak from that point. Just another angle... While the offer sounds intriguing, what I personally glean out of it is “security”, “health and welfare benefits” hopefully. A start up C suite may not have the bells and whistles of a mature company C suite unless you have absolute certainty this will grow into something really big. My gut is that you continue with your LLC, you alluded to financially being better off by yourself but if the partnership gives you all the other sucurity you cannot get from your LLC then go for it, otherwise you will learn and grow soooo much on your own and have that on your resume for future better paying partnerships or companies you go to. The best and most important thing is you have already started working for your LLC which is SOOOO admirable. So many people want to start their own thing but so little follow through, it takes guts so at least give it a go.

13. Alison SwerdloffNovember 21,2020 at 2:06PM UTC

    From what I am understanding this position is only part time, so why not do both? Continue to build your consulting firm while working part time at the start up. If it fits in with what you believe in and the hours work for you, are you really losing anything? Also, if you can create a schedule that allows you to work for this company let's say from 9 to 1 daily, you still have plenty of time to do your consulting work and you can have the start up pay your salary into your LLC, so it is as if they have hired you that way. This way you are still a contractor and not an employee, as your company is the actual employee. Just something to consider.

14. AnonymousNovember 21,2020 at 2:15PM UTC

    I worked at a software start-up. My position's compensation included stock options in the event we sold the company. This was clearly an incentive. At the peak, there were 18 of us in this role. Unfortunately, prior to the sale, most employees were let go leaving the original, very small group (~10 people) to reap the benefits. While I see their reasoning, they should never have written anything about the stock options into our contracts. On this side of it, my naivety gone, I would consult an employment attorney to review the contract.

15. JYJNovember 21,2020 at 2:22PM UTC

    Do you have the option to consult with them as opposed to taking a PT role?

16. Nichole ScottNovember 21,2020 at 2:38PM UTC

    Sometimes distractions disguise themselves as opportunities. You have a start-up you LOVE. If you need the money from this job, I'd say take it but be careful it doesn't take away from your business. If you don't need the money, do as someone said in an earlier post and take them on as a client. I just started my own business as well, and it gets tempting to look at other jobs still. What we have to do is get out of the "employee" mindset because we chose to leave that side behind. You are an entrepreneur now. Congratulations! Now, you have to act and think like one.

17. AnonymousNovember 21,2020 at 2:39PM UTC

    As a fellow dedicated and passionate entrepreneur, I'm so happy for you! My advice is to say YES because it feels good to you. Let them know that you'd expect a salary increase as soon as possible, and remember nothing you do has to be a lifelong commitment. See what happens. Good luck and keep us posted!

18. Michelle MoultonNovember 21,2020 at 2:59PM UTC

    Hmmm, what to add to all the good advice? I don't recall reading much in the comments on the effect that taking on this additional opportunity will have on your personal life. If you are already working extremely long hours each day on your business and then take on or carve out time for the PT role, will the lesson the time that you have for yourself? I find that most people underestimate the amount of time needed for both of these types of commitments. While you may have the stamina and time to devote your efforts to both, how long can you maintain that level of workload before it begins to affect your health both physically and mentally. If you still desire to do both, then set limits with the PT role ahead of time with the owner and the option to reassess your contribution after a set length of time. The last thing you want to do is destroy the work you have already put into your business. Good luck!

19. Denise GorantNovember 21,2020 at 5:04PM UTC

    Invest in yourself. I’ve made this mistake a few times. If you have a viable business of your own that is your passion, focus on that. Then you’ll be the family friend offering stock options. Best of everything to you!

20. AnonymousNovember 22,2020 at 10:29AM UTC

    I agree with Denise Gorant. If your LLC is your passion give it all. Not many people are able to make their passion their business. I understand that It might be scary and tough and the security might be appealing. But Whatever time you invest in your own business you will get the reward. On the venture, it is a venture and as a start up it might demand a lot of time and energy from you regardless of what is agreed. Are you willing to go off your passion for someone else’s? As some said above, make it another business you consult.

21. Cheryl MagenNovember 22,2020 at 9:32PM UTC

    As hard as it might be to hear, I would say, Proceed with Great Caution!! I think that with a start-up, PT means FT and FT means all the time...because there is so much energy to get things going, it will not truly be PT. You're investing in your own business and are happy. Let it go....if they want you down the line, you can see where you are then.