Startup Compensation for a Web Engineer

digitalagedigitalage subscriber Posts: 1

I just joined a startup as a Web Engineer.  There are now two founders and two engineers.  The startup is in the Web 2.0 space, has only been around for a few months, and has no financial backing.
The two founders have allocated a million shares of stock.  Both of them hold just under two-thirds of this amount and have planned for one-third to be given to investors.  As compensation, they have offered me a complete stock package of 1.5% of all shares.  The plan does not include a hourly wage or a salary.  This type of compensation will be available when we get founding.
I`m new to this scene, so I have no experience to draw from and have the following questions:
* Does their stock allocation plan make sense to you?  What is a common plan for startups?
* Re: my compensation, do I deserve more stock?  If so, what do you think is fair?
* What kind of compensation package is typical for an engineer that hops on board very early on in the life of a startup?
Their math doesn`t add up to me.  I feel that they should take a smaller percentage of all shares so that there`s a larger percentage to give to investors.  I also feel like I deserve more than 1.5% of all stocks, especially when you take into consideration the number of investment rounds needed for a successful startup and the resulting delution.
Since I`ve never joined a startup before and have never been offered a complete stock package for compensation, I will appreciate all advice and comments.

digitalage3/5/2008 12:46 AM


  • benmunozbenmunoz subscriber Posts: 0
    You are getting screwed.  I`m both an MBA and former engineer.  You are a technical co-founder, so you should get something slightly less than them.  4 co-founders - maybe 30/30/20/20 with no investors.  If investors take half for their contribution, everyone gets diluted equally. 
    Cofounders: 15/15/10/10
    Investors: 50
    If they can get funding to pay you market wage, then you aren`t really a technical co-founder, you are an employee, so market wage plus 1.5% makes more sense. 
    If you`re taking on the risk (no funding), then you should get the reward (10-15% equity).  If you`re taking on little risk (decent salary), then you should get little reward (2% equity).
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