Startups Stack Exchange Archive

Founder salary and severability of contract

I’ve been asked to join a single-person startup as co-founder (position: VP of Sales). He has already coded the app and incorporated a company, of which he is CEO and sole board member. I’ve been working for the past month but now requested putting something down in writing. He had his lawyer draw up a contract and a couple of things are making me nervous. I’m new to the startup world so maybe these are standard. Please advice!

  1. No Founder shall receive any salary or other compensation for services rendered to the Company as a Founder or otherwise, except as otherwise agreed upon in writing by the Founders.

Right now the company is bootstrapped but hopefully we will start generating some revenue in the coming months. We are also planning on raising VC money in a year. This implies I never get paid!

How do I play this? Do I suggest adding a clause that says upon third party investment, I shall receive a silicon valley comparable salary?

  1. All provisions of this agreement are fully severable.

This means he can change his mind anytime, say after I have worked for 11 months and sever the contract (I have a year cliff in my vesting schedule). I thus get nothing for 11 months of work.

Is this normal? I thought I’d suggest modifying it to read: This Agreement may only be changed, modified or terminated by an agreement in writing signed by both Founders.

What do you guys think?

  1. Along the same lines, a friend suggesting protecting myself from ‘termination’ by immediate vesting of x% if I am terminated from position of founder without cause. How do I phrase that though and what is a reasonable percentage?

Thanks all

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