Ladies / Gentlemen, yours truly has recently interviewed and tentatively accepted a part-time position. The job will be sales and promotion and I will be the first in the north east with the possiblity of leading the regional team if expansion occurs. Since I am a MSD (medium swinging d), I couldnt accept a full-time position and settled on a part-time employment. I recently received the written offer and compensation will be in the form of hourly wages and bonus (not substantial). When I first reached out to the company, I did so with the intentions of working for equity.
My question to the audience is how do I go about negotiating with the firm an equity stake instead of this trivial hourly wage?
I first heard their ceo pitch his idea on bloomberg about 3 weeks ago (the idea relates to the food & health industry which is a passion of mine). I immediately reached out to the firm (both called and emailed) and expressed my interest. We emailed back and forth for sometime and eventually setup a skype interview (they are located in the west coast). The interview was very relaxed for two reasons: first, I offered to work as an intern on the weekends to prove my value since i assumed they couldn’t afford me. Secondly, if this discussion lead to nothing other than “it was a pleasure speaking to you”, I still have my current job to fall back on.
jcole, i email you directly you crooked smile mofo.
I can assure you all it is not rangoons, those aspirations can still be unlocked.
KR - yes it was opportunistic but just about everything in life is, right?
STL - without giving away the firm, they produce healthier condiments at a discounted price using plants instead of animals. The target audience is your everyday whole foods shopper. On a side note, they assured me it was ok that my lifestyle revolved around eating massive amounts of animal protein.
Jcole - stop collaborating with drizzy for a second and respond to my email.
I started out building up our corporate finance team (previously only had strong accounting team) - so the role itself was a blend of start-up mentality (coming into the unknown, need to be flexible/adaptable) and ‘corporate’ (structure/strong data/etc…). The organization itself is very data-centric, so the analytics background blended with a semi-entrepeneurial approach (willing to work-hard, comfortable doing things for the first time) was a good fit. From that role, I was able to transition into a more operations/business strategy/tactics/execution role, which I love. For me, I had to acknowledge that the culture was going to be a 180 from where I was, but that I was excited for the opportunity, challenge, and was aware it would be an incredible challenge to be successful but that I was confident I’d be up for it and wanted/was excited for the opportunity. The CEO spent most of the interview telling me about how hard it would be and sort of talking me out of it, but I continued to reiterate my interest and that I was willing to work hard enough to be successful. Might be just the setup I lucked into, but in general I think acknowledging the challenges and that it will be different and harder than what I’d been doing was key to getting the shot. From there, performance speaks and a smaller shop gives you a ton more opportunity. It makes me sad to think about the next stop in my career - hopefully I’ll be chipped up so I can wait and be selective about what I do, but I don’t think I’ll find another organization like where I’m at. And the story continues with my last piece of feedback - just make sure the leadership is strong and the opportunity is right (not only for the role, but that the company is well positioned for massive success - scalable, broad market, strong competitive advantages, all that). Every start-up thinks they’re this, but the ones that actually are, well, they’re unicorns - and unicorns are rare: http://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/
And thanks for the article Jcole. I am just starting to research the industry, and any good quality resources(or a piece of advice) are much appreciated.
Not sure where you are in your career or what your job circumstances are, but unless you have a prior track record in that particular industry or with start-ups, it’s unlikely they will give you equity, at least in year 1 and possibly year 2. You have to understand the mind of an entrepreneur – while you may look at it as rolling up your sleeve for a pittance with unknown upside, there is something in the mind of the entrepreneur that truly believes they will be successful. And if you want to be part of that success, you have to earn it before he/she carves up a slice of the pie for you. On the other hand, what you are looking for is some participation in the upside while working for an hourly pittance. Understand going in that minds don’t always meet, and you need to take a real leap of faith not only on the business idea but also on the people you’re working with that they will do the “right thing.”
Start-ups can be truly rewarding if they’re successful and there is a meeting of minds about compensation and goals. However, absent highlighting relevant skills and track record, you don’t have much negotiating leverage. Then you need to ask yourself, how much risk appetite do you have to join a start-up?
Not sure that this directly answered your question but there are just certain people that can hack it at start-ups, and certain people that can’t. I helped launch a start-up myself in the past, but because someone else’s name was on the door, he was pretty much the shot-maker. The equity stake I had gotten was pretty minimal and I was also at a point in my career where having steady, guaranteed compensation mattered more than potentially explosive upside that I’d have to wait 2-4 years to see anyway. My needs were at odds with what a start-up could provide and eventually I moved on. It was a great learning experience though, since I did take a lot of relevant skills and knowledge to my next job, but it also helped me understand that even my entrepreneurial mindset had its limitations and I’m at the point in my life where I value guaranteed income much more than shooting the moon.
If you’re curious to do a start-up, go for it. Just make sure you really like your team and you have a realistic view on your pathway to getting paid. The odds are against you and the timetable to monetization can be quite long. You’ll be better in terms of your “world view” for having gone through the experience, but you might be sacrificing a lot monetarily in the meantime. See, the people that are launching the business are probably in a different place in life which enables them to take such risk. You need to ask yourself whether you can put yourself in those same shoes too.
^Thanks for the feedback and guidance. I personally couldn’t take on all the risk, hence my part time position. I actually like the freedom they are providing me - i hired a recent college girl to work for me - and that is cool itself. I also like the upside of possibly managing a large region. Having said this, i foresee my downside as trivial. Albeit i am sacrificing my weekend and a lot of nights, this I admit is costly, but beyond that i also have my current job to fall back on.