I am writing this article to tell you the truth about what it really means when an entrepreneur asks you (software developer) to join his/her new startup company as a tech co-founder.
Since I got promoted as a senior developer in a corporation a few years ago, a lot of ambitious entrepreneurs have reached out to me to ask if I’d like could join their new startup venture and they offer me to become their tech cofounder. Of course, it seems really tempting at the beginning since if you work for a corporation, you know it’s nearly not possible to climb the corporate ladder to become that kind of level and they are offering you this opportunity right now!
But let’s ponder on it a little more in a perspective that there is nothing free in the world. If the offer is too good to be true, then there is always a catch there, right? Let think about the reasonable offer you would imagine. It should be “we will pay you $100K per year as a full-time employee” or something in that line. However, as you can imagine, they are just a startup company which means all they have is nothing but a million dollar idea. It seems pessimistic but it’s the truth. Therefore, what they will offer you should be “hey we are still in an early stage, so we can only offer you $0 per year to develop the software from scratch. But we will offer you 9% equity as a tech co-founder” or something similar. Equity?! Wow, I can only get 0.00...1 percent share for the current company I am working for, and they are willing to offer me more than a thousand times of equity to me. How tempting it is! But just stop and think about it. What the startup company has currently is nothing but a million dollar idea. How much do you think their equity worth right now? It’s absolutely ZERO since no one is willing to trade for more than zero dollars. Don’t let your vanity mind wash your brain. These are just too good to be true.
Moreover, let me explain more about what it really means literally when an entrepreneur asks a software developer to join his/her new startup company as a tech co-founder. The way they usually put is “let become a millionaire together by making this idea come true” or in other similar languages. When they mention “Tech cofounder”, what it really means literally is “Free developer to build an app for me from scratch”. That’s the truth. This might sound ugly or uncomfortable in the beginning but ponder on it a little more. They don’t have the funding to pay you and all they have is equity. If they offer you little equity like your current employer and ask you to do all the work, you would most probably reject the offer. When I said “you will do all the work”, I mean it. The reason being that, at this stage, they most probably will say they are waiting for a developer to build a software for them so that they can start to sell and do marketing for it, so there is no work for them until the software is built. Hence, they usually will offer a lot more equity to you than your current employer and call you a tech co-founder to get you interested in their “company”.
Now you know the fact, you might ask me “what should I do now?” or “How can I deal with this situation?” Don’t worry! I am going to post another article to talk about it and share my personal experience on how to deal with it in different contexts.
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