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ripe-daybreak-76368

10/14/2021, 8:51 PM
Need some help Before accepting an offer for being 1st employee of a startup what should I verify/ask/look for ?
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lemon-knife-94497

10/14/2021, 8:57 PM
Check their company info on Ministry of Corporate Affairs' website. If found no match ask them when it was registered and under what name. Some companies have different legal and brand name. Also ask about esop/vesting duration/selling options. It is a good idea to have esop since in general your effort and time may not be compensated by salary alone.
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tall-advantage-5586

10/15/2021, 1:54 AM
Ask how they are funded and how long of a runway they have. Also ask them about what could potentially happen that will make them shut it down.
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cold-school-3088

10/15/2021, 6:34 AM
If you are the first employee, IMHO for all practical purposes you are a founder. Which means: 1. You should know and trust the people you are going to work with, itโ€™s a long term and tough commitment that you are going to make 2. Have a reasonably large equity upside Point 2 here, needs to be tempered by the fact that you should be sufficiently compensated, which the founders will probably not get. And get everything in writing, formally.
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ripe-daybreak-76368

10/15/2021, 12:38 PM
@lemon-knife-94497 @tall-advantage-5586 @cold-school-3088 How much should be an ideal range for equity? Should I ask for percentage stake or fixed number of shares? Should I make a reverse bond where company will be liable to pay me salary of a least number of years whatever happens so kind of job security?
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cold-school-3088

10/15/2021, 12:49 PM
All predetermined ranges are optimised for the firm or the market. Throw all formulae out and do the math from first principles - calculate risk weighted returns and decide if itโ€™s worth it. PS: That bond sounds like taking a guarantee from a cancer patient that they will run marathon in the next 4 years! Most small companies die. My suggestion, ask them to make an offer. If they have already, then do the math - make a counter offer, where itโ€™s just a yes/no.
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tall-advantage-5586

10/15/2021, 1:44 PM
I've heard that first employee range typically is around 0.1-1%. But if you are an industry expert and your role is critical to the startup's success, you should get more. Or if you are taking a pay cut compared to industry standards, you should get more. Everything being said, the exact amount is not super important. What's more important is if you believe in the team and the problem you're trying to solve. 10% of a failed startup would be worthless but even 0.1% of a successful one would be a great upside. Bonds are generally a bad idea for either side. Even if you do get them to agree to it, you won't be able to enforce it if the company goes under. So it's not worth it imo.
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ripe-daybreak-76368

10/15/2021, 8:07 PM
Thank you guys it was helpful. Will keep y'all posted