Startups Stack Exchange Archive

Equity in a new company

Next week I will go to London to negotiate opening of a new company in South America.The english firm should provide us with equipment and software,I will be responsible both for client search and technical part of the business(at least before we employ new people,after we get the orders).Is it reasonable if I ask for 10 % of the new venture,if not, what should I accept? I have been working in academia so I am new into business.

Answer 11196

Your question is too ambigious. You don’t provide any details and ask for advice.

Are you being hired to manage the new firm? Or did you just respond to an ads in newspaper “looking for a manager to direct new firm”?

Do you even have qualifications to lead a firm? Or are you just out of school ‘promising young generation bright fellow who will become next Steve Jobs’?

What values do you bring to the table? Is it your expertise in management? Is it your capital investment? Is it just being young and full of enthusiasm? Do you know why should the firm owners give you equity? Or even hire you?

So, answer these and many other questions and determine your own importance:

  1. Are you critical to the firm’s success? If yes - you get equity, high amounts, personal driver, jet and whatever you want.
  2. Are you good enough to manage new firm? Have experience being a top manager in another one? At least few years? Got some good results to show for the period you were in power? Increase in earnings? Great PR and customer relationships? Well, they might give you a pretty high salary. And recommendations - for when you leave them in a few years. But absolutely no equity - why would they, you are replaceable..
  3. You have nothing. No value. Just a bright promising graduate with no experience. Well, your salary will be good enough. Come back and talk about more in a few yeares.

All content is licensed under CC BY-SA 3.0.