Re:Ask HN: How to get stock as a contractor or consultant?
by JoeAltmaier on Monday November 02, 2015 @11:39AM
(#10492865)
Ok that's the critical difference - I have warrants. Due to all the reasons you mention. They vest; they have a cliff; they expire 2 years after severing our relationship (which has never happened).
And what startup has liquid stock? I'd love to work there.
Re:Ask HN: How to get stock as a contractor or consultant?
by tptacek on Monday November 02, 2015 @11:47AM
(#10492932)
I think I'm being too elliptical. I'll be blunt: my prediction is that the overwhelming majority of startups that are willing to offer equity in exchange for contracting work are going to fail, and fail at a higher rate than other startups.
A willingness to pay in equity for consulting would to me be a red flag that the startup I was talking to was poorly managed.
Re:Ask HN: How to get stock as a contractor or consultant?
by JoeAltmaier on Monday November 02, 2015 @12:00PM
(#10493054)
I'm guilty too. To be clear: this startup tried to recruit me as CTO; I insisted on remaining in my partnership. They wanted very much to keep me invested in their idea, and warrants etc were a way of doing that. So not the usual kettle of fish.
Further I too would never consider stock instead of pay for any consulting activity. That's a loser move.
When did this equity compensation deal start? The most important feature of employee options vesting is the cliff; your deal was something like "if I'm still consulting for you 12 months from the start of our first statement of work, I get 1/4 of the promised options"?
How does tax treatment of those options work? Most of the reason that employees are put into a crunch period after they leave where they have to spend real money on shares is that US tax law requires employee options to expire within some number of days after the employee relationship terminates. But you're not an employee at all; how can you have employee stock options?