Engineering was six before the unpopular e-commerce pivot. Two left soon after pivot, one left a bit after. Three remaining stuck around through the period where the CEO was shopping the company hoping that they could keep working together and with the well-regarded product manager.
It was a high functioning team. Heartbreaking to see it cast to the wind.
.. so, even after the increase the total whole engineering team equity was 0.6% ? Disregarding everything else, this fact alone doesn't seem particularly ok.
That depends on a lot of factors, for instance how much money the tech team invested and how much money the other shareholders invested as well as on the moment when they joined and what what other compensation there was. Hard to make a judgment about any of this without knowing all the particulars. It is very well possible those guys were being exploited but it is also very well possible that this was done by the book.
I keep hearing this. And you'd think with my exposure to start-ups that I'd see a lot of evidence of this. And while it does happen it seems to be the exception rather than the rule. Founders are quite often engineers, angels and VCs are not usually blood sucking vampires (though I'm sure those exist as well).
The rule is simple: if you are either late to the party, not aware of your value or compensated as an employee (rather than taking no money off the table in the first couple of years or so) then you will end up with a very small part of the equity.
If you are (a) a (co-)founder, (b) aware of what you contribute or (c) willing to be paid mostly or wholly in equity then you will end up with a substantial portion of the equity. You will then still have to make sure about how the rules around dilution and vesting work to make sure that you get what's yours. But that can be learned in an evening or two. (as opposed to being learned in 3 years with a lot of headaches as a final result and not much else to show for your hard work). This is not nearly as hard as learning how to program or engineer stuff so any tech guy worth their pay will be able to do this. If you can't find anybody to help you out on this front and you need answers feel free to mail me.
That´s seems a very small part for a founding team.. We are a team of 5 (+1 cofounder-investor-accelerator), 2 cofounders and 3 of the founding team. All of the founding team are getting paid below the market, but they also maintain side jobs. They get around a 3% each. If they have accepted to work for no salary, it would have been around a 10%.
Just take in to account that almost all the angel round is going to pay them, but I don´t feel they can have less than that. The part of the team is a 10% and if the team grows it will also grow (they´ll only take dilution once/if we get a VC round). I don´t know if that´s close to the norm in SV.
It was a high functioning team. Heartbreaking to see it cast to the wind.