Sorry, but I doubt that the guy is actually going to give you any equity. You could say you are leaving unless he gives you an offer on paper (which should include some notion of the percent of the company you will get - if he just offers 100,000 shares you can bet he will set total shares to 100,000,000,000 to screw you out of owning a real chunk), but he'll probably call your bluff.

As another poster suggested, get out and go freelance. Maybe you can steal his clients - I hope he has been as lazy on the non-compete as he has on granting options.

Agreed.

Originally he brought this up and I was thinking like 10 to 20%. He then said something to the degree of a half percent per year.

I unfortunately did sign a non-compete. The founder has pretty tight connections within this industry. It would be hard to steal clients to begin with -- I make sure all of the work is perfect and the clients are happy. I also would feel unethical doing so.

Check your state law, non-compete may not be legal.

They're enforceable in Pennsylvania, and poaching clients is one of the more direct and easy-to-prove ways to violate one.

datawalke can go nuclear and threaten to drop a dime on the IRS (and the state come to think of it). The boss may think he's being smart by using Simon Legree as his role model but it's set him up for some really severe real world retribution, very possibly including personal bankruptcy (see my earliest reply in this topic for details: http://news.ycombinator.com/item?id=1446428).

Whether to do so may be a personal choice. But if you do, get out first; don't do it while you are dependent on the place. Based on your description, finding other work that pays at least as well should not be terribly difficult even in this market (the one caveat being to explain why your pay was so low; there was a recent HN conversation on whether to provide previous pay data and how to appropriately decline to do so, that may be useful). And you don't want to be job hunting while embroiled in such a scenario.

Based on your description, I would expect NOTHING from your current employer. Actions speak louder than words, and this guy's actions have "asshole" written all over them.

He could also heavy his boss into releasing him from the non-compete. A lawyer would be necessary here, as you don't want to cross the line into blackmail ...

The others are right, you will never get enough equity from this guys to equal anything.

He'll give you 10k shares at 10 cents apiece and then want you to shut your mouth about it. Which is great, if the company is sold for $100,000,000 -- but it won't be, and he will continue to pay you less than 16 year old make at In n' Out burger and drive you into the ground as a penalty for holding his feet to the fire.

People that value other people, would have never had you in this position in the first place. He doesn't, walk away.

Based on that additional piece of information I have some advice for you.

Take your boss aside, and tell him that you need his undivided attention for an hour or so, later today. Wait patiently until whenever he agrees to meet you. Then tell him that you believe the current situation is completely untenable. Tell him that your intention is to quit, immediately, today, and that you still believe that is the best approach. However, rather than necessarily abandon him, you will remain open to instead receiving a portion of the equity. Decide BEFOREHAND what portion of the equity you want, and make sure it's something that would make you feel GOOD about working for peanuts for a few years. Tell him to think about it overnight, and see what he says in the morning.

Based on what I've heard so far about his personality, I'll predict that he'll probably tell you to get lost. Or he'll beg you to stay without the condition. But stand your ground. Then go find a better job.