How should I set up compensation as a part time CTO for a bootstrapped startup?
I previously did some hourly development work for a startup, and the founder approached me and asked me to be a CTO on a part time basis until they have enough profit to support full-time employees, since the startup is bootstrapped. Last year they had ~$60k profit. Profit has consistently doubled year over year; they're on track to double this year as well.
There is currently only one full-time employee (other than the founder), with contractors on an as-needed basis. The full-time employee is compensated through profit-share and equity, and the same would be true for me.
I'm meeting with the founder later this week. I've never negotiated a role with a payment structure like this, so I would appreciate hearing about what would be realistic for me to expect.
Thanks everybody! Please let me know if there's any other info that you would need in order to help me land on some numbers for equity and profit share.
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Discussion
(2 comments)- 023 days agoTech Lead/Manager at Meta, Pinterest, Kosei
It's hard to offer a negotiation "playbook" here since the situation is so bespoke. Compared to something like a mid-level position in FAANG (quite standardized), there are so many more variables here. I'd start by gaining clarity on these questions:
- How many hours/week are you expected to contribute?
- Is there a possibility of earning equity in the business or just cash?
- How important is the technology to the success of the product? Is this work fairly straightforward, or are there gnarly technical problems?
And then understand how much leverage you have:
- How bullish are you on the future of the company?
- $60K profit is impressive, but that also doesn't seem like a high-growth business if the company has been around for several years already.
- What would the founder do if you didn't join?
- How much do you like your current job?
- How much do you need the extra money?
In a vacuum, a decent starting point is to look at hourly rate for a Senior/Staff engineer in your region, which could be anywhere from $100 - $500 / hour.
- 0
23 days agoLead Engineer [OP]Taro CommunityGoing in with those questions is a good idea, and knowing that there isn't a playbook for a situation such as this is honestly helpful. I felt like I was missing something, but this is just very unique.
The tech is critical and there are some gnarly problems to solve. I like my job, but I would be fine to leave it if this went full time. And the founder would have to find an expensive dev shop if I didn't join.
I'm pretty bullish, don't really need the cash, and would like to roll the dice on how much I could make through equity. Thanks for the feedback!
