salary, negotiationI have received a proposal to join a startup that looks mostly fine but I am not fully sure if they can make money from they idea, and if the could, how soon this may happen.
The company provided an employment contract to sign. This contract includes a salary that, while not so big, would be acceptable. However I have doubts about the company’s ability to pay the promised salary (too small, too early, obviously not making any money now). I know some money are required to register the company (they are AG), but I am not sure if the company should keep this money after registration or can simply spend and then have no any.
In order to quit my current job, I would like more additional security. Is it appropriate to ask them to show the bank statement of the company’s account, or other similar documents proving there are money for my salary available?
If the company has given you a valid employment contract with a salary, then they intend to pay you that salary.
Most startups work from investment funds and “burn” through them to pay for things such as employee salaries.
Assuming you are not subject to some kind of scam (and I see no indications that you are), and then you should expect the salary as arranged. It is written in a legal document, and that is about as much assurance as you can get.
If you join, you should treat postponement or partial payment of your regular salary payments as a warning signal that something is wrong, although sometimes that might be an honest problem or mistake if e.g. for only a week due to changing payroll provider.
In order to quit my current job, I would like more additional security.
How much security? Joining a startup is more risky than joining an established company, you trade long-term security for possibility of better rewards later (maybe in the form of rapid promotion, maybe in the form of a share options scheme)
Most startups fail. It is entirely possible that you will work this job for 6 months or a year and the company will fail to meet enough of its goals to be seen as viable for further investment. In which case you would still be paid for that time, but could lose your job.
A worst case scenario is that the company goes bankrupt whilst owing you some wages. That can happen, although a good company would warn you it is a possibility, if investment runs out but there’s a slim chance of making through a month if only some particular order comes through. Good companies will also prioritise paying employees above other financial obligations. One way to mitigate a possible loss there is to not allow any missing pay situation to extend for a long time on a promise.
Is it appropriate to ask them to show the bank statement of the company’s account, or other similar documents proving there are money for my salary available?
No this is not appropriate, and will come across as rude and confrontational, unless you are joining as a founding member or investing in the company. If you are a founder, then you should be involved in discussions of how finance is managed, and will want to track it. Investors also will expect and get privileged access to company finance information.
Assuming you are an early stage salaried employee, normally a well-managed start-up will share some, more limited but still interesting financial metrics with you, perhaps in routine team meetings. In startups I have worked it was a routine to see monthly, quarterly revenue, year-on-year growth, the sales pipeline, the current burn rate etc. It is that kind of information that the company could share with you.
Instead of asking for documented proof of funds, maybe ask how much “runway” the company has (how long they predict to remain in business at current rates of loss), and how they are approaching investment. They might give you information such as they are looking for “Series A” investment or have Kickstarter funding, or something else - you can look these terms up, and get a feel for how well set the company is financially, at least for the short term. Also, you could ask if they have any presentation about business status that they share with employees that you could see (they might want you to sign an NDA to see this).
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