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Boss wants to start an eCommerce business with me. Should I ask for equity in this new business?
I will still be working as an employee in the current business. He will be contributing his experience in the industry and existing employee resources. I will be responsible for sales and marketing.
Yes you definitely should. This is a legitimate way to get rewarded for all the hard work you will put in to get the business up and running. Ecommerce business is never a joke and requires hard work and dedication. Claim what you own!
The truth is, you probably shouldn't care about equity. If you're doing S&M, claim what you want in terms of equity, but getting performance based comp / rev sharing should be a) more lucrative, and b) a more reliable bet.
Having equity in a business only makes sense if a) you've got decision rights (doesn't sound like you're in a position to negotiate 50%+) or b) you have a liquidity event on the horizon (even if it's 10 years out). How many e-comm businesses has your boss sold? What was the payout? Do you want to stick around for 1 year before you hit your 1 year cliff and get 25% of your equity, and then hang out for another 3 years before you get 100% of your equity?
Real comp is perf-based.
Both Akshay and Devin bring up good points but I think there is more to add. I'd want to know the following:
1. Are you an employee or a partner?
2. Is this a full-time gig or a side-project?
3. Is this a long-term partnership?
4. Are you making a regular salary prior to any significant revenue?
I think you are entitled to equity in the company if you are a partner, it is a full-time gig, long-term project, and you are receiving little-to-no salary. However, do not expect more than 5% - 10% of the company for a marketing and sales role. However, if this is a part-time gig and you are more of an employee than a team member then I would request a competitive salary with performance-based bonuses.
Sure. If you are leaving your present job to work full time and are one of the co-founders, Why not? Let us say your Boss' name in Tom. Question is in what role you envisage yourself and Tom perceives about you. When Tom mentions next time, just say thanks for giving me the opportunity to be your founder and you will know.
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