They don't respect you at all and they're a completely lost cause. They're likely to screw you over or replace you at the first opportunity and blame you for any failures.
Two percent is insulting for the sole tech guy on a team of three. Even if they had an absolutely BRILLIANT idea and SUBSTANTIAL experience in the given industry.
Yes, but if that were the case you would expect that they could raise money to actually pay someone... These guys sound like greedy B-school type clowns. I bet the idea is pretty silly too. Probably something that is technically impossible...
Insulting? In my experience it's actually not that uncommon. The "sole tech guy" is only going to be that for a short period. Unless the company plans to create something extremely simple and boring.
I'm not sure what you're basing your statements on. But it sounds like you've gotten a very bad deal in the past. Or, you've had no deals in the past....
"I'm not sure what you're basing your statements on. But it sounds like you've gotten a very bad deal in the past. Or, you've had no deals in the past...."
Well, okay, if we're going to make ASSumptions:
Maybe you're just sensitive to this situation because you are ALSO trying to get some poor schmuck to take 2% equity and no salary to implement YOUR big business idea, which is all you have to contribute to the venture? Or maybe you're a hacker that took 2% equity for implementing someone else's idea and you're trying to rationalize your empyty bank account and minimize the cognitive dissonance for yourself?
I'm going to ASSume there is something in YOUR past that makes you unable to hear the fire alarm bells and see what a bad freaking deal the OP is being offered.
They're also going to bring in more suits later and yet the first suits don't see that as an argument against giving them substantial equity.
We can argue about how much the superstar VP of marketing is worth, but we both know that the question doesn't come up if the first few tech guys don't hit a home run.
Often the "first few tech guys" don't have to do much more than create a working prototype.
It's extremely common (I'd venture to guess 80+% of the time) that the product that is launched is substantially different than the original concept. So, the initial coders are there to help prove the viability of the idea, not always to write 100% production-ready code.
"Suits" is no more insulting than "tech guys" or "hackers".
As to the difference between the initial product and the initial launch, that's just as true of the idea as the code.
In fact, experience with the prototype and its development is what reveals what the viable idea actually is.
If the difference between the prototype and the product is large, the prototype development clearly had huge value, and it was largely due to the "tech guy".
If it's not large, the relative contribution of the tech guy ranges from secretarial to huge, depending on the idea.
If the company wanted just someone to code a prototype they could probably get a couple thousand dollars together and hire a contractor to do it. As long as the success of the company is based on the execution of the software you have to hire top notch developers and pay them accordingly. The idea itself is not worth that much, most of the time it's about the execution. And if these guys could raise some money without any code then they should go ahead and do so and they pay market salary. Until they can raise enough money to pay close to market rates they need to pony up equity to developers.
They don't respect you at all and they're a completely lost cause. They're likely to screw you over or replace you at the first opportunity and blame you for any failures.
Two percent is insulting for the sole tech guy on a team of three. Even if they had an absolutely BRILLIANT idea and SUBSTANTIAL experience in the given industry.