This is where the Equity Equation, and some other common sense factors should be considered for your situation.
Will your contribution grow the company by more than 2% in value? (I would guess most likely yes).
How easy it is to find someone else willing to take their deal (more competition drives the price down).
Will you be "coding to spec", or "nurturing the idea"? Having an idea, and executing an idea are 2 very different items. I personally have an idea for a startup that I am working on with a friend. To bring it to life, I'll need a couple of web developers. Those first couple of developers will be key to turning my idea into a product, BUT there are many many people I can choose from. Thus, I wouldn't expect to give them a double digit stock percentage.
You can't allocate all of the stock out on day 1 (well, you can, but it's not a good idea).
Also, IME, there is no such thing as an "unofficial" co-founder. It's like being sort of pregnant. You will either have an equal say/vote in critical areas of the company (how much money will we raise. How do we lay out the cap table. How much to we pay. When do we hire, etc). If you will not be participating in those discussions, you are not an "unofficial co-founder". You are employee #1. Big difference.
What is your 2% likely to be worth? What are the plans for the company? What's the trigger point for pay (and how much)? What can you do to get more stock at a later date? You might very well be able to come to some agreements like "If I get features X, Y, Z and 27 done by 1-Jan, then I get another 2% share.
Also, you mention 2% equity stake. Is that a stock grant or options to purchase stock.
Lot's of unanswered questions here, but I can tell you that stock isn't metered out in proportion to your employee number. It's metered out in proportion to what you are uniquely qualified to bring to the organization.
>you are not an "unofficial co-founder". You are employee #1. Big difference.
If you're not getting paid, how are you an employee? If your only compensation is equity, that means that you're putting as much on the line as the co-founders, with an equal level of odds of getting a return on your commitment. In that case, your payout on the gamble should be, if not the same, at least comparable. If they're unwilling to offer that, then there needs to be a fair salary from day 1.
Employee is a pretty loose term. He is doing some work (coding) in return for something of assumed value (stock or options). Just because he is not getting an actual paycheck does not necessarily mean that is not an employee of sorts.
There is also no mention of how much of a track record the OP has in terms of creating success. Everyone is going on about how this is such a raw deal for him. If he has no real wins on his resume, this could be a huge opportunity to create something that he can take a lot of credit for, and leverage that to either co-found his next venture, or join an early stage startup with the ability to demand a good overall package.
Sometimes you have to actually take a less-than-optimal deal to build up a platform under yourself from which you can shout your next requirements from.
> Employee is a pretty loose term. He is doing some work (coding) in return for something of assumed value (stock or options). Just because he is not getting an actual paycheck does not necessarily mean that is not an employee of sorts.
Will your contribution grow the company by more than 2% in value? (I would guess most likely yes).
How easy it is to find someone else willing to take their deal (more competition drives the price down).
Will you be "coding to spec", or "nurturing the idea"? Having an idea, and executing an idea are 2 very different items. I personally have an idea for a startup that I am working on with a friend. To bring it to life, I'll need a couple of web developers. Those first couple of developers will be key to turning my idea into a product, BUT there are many many people I can choose from. Thus, I wouldn't expect to give them a double digit stock percentage.
You can't allocate all of the stock out on day 1 (well, you can, but it's not a good idea).
Also, IME, there is no such thing as an "unofficial" co-founder. It's like being sort of pregnant. You will either have an equal say/vote in critical areas of the company (how much money will we raise. How do we lay out the cap table. How much to we pay. When do we hire, etc). If you will not be participating in those discussions, you are not an "unofficial co-founder". You are employee #1. Big difference.
What is your 2% likely to be worth? What are the plans for the company? What's the trigger point for pay (and how much)? What can you do to get more stock at a later date? You might very well be able to come to some agreements like "If I get features X, Y, Z and 27 done by 1-Jan, then I get another 2% share.
Also, you mention 2% equity stake. Is that a stock grant or options to purchase stock.
Lot's of unanswered questions here, but I can tell you that stock isn't metered out in proportion to your employee number. It's metered out in proportion to what you are uniquely qualified to bring to the organization.