Ep 302: Should You Work For Equity? A High Title? Free?

​Our Discord community has been discussing whether or not someone should work for free (volunteer), get paid actual money, be paid in equity, be paid in a startup title, or something else. Especially at startups, the ​job offer is sometimes a future promise of something that might be of value. But there's a lot you need to understand about equity and shares!

Transcript

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Welcome, low ego action heroes and phoenixes. I'm Debbie Levitz from Delta CX, and it's mid-July 2026, and this is episode 302, where we're going to talk about should you work for equity, like in a startup or new company. Hi, Anna Lucia. Should you work for a promise of a high title? There's so many uh startups out there now. There seems to be more than ever, and a lot of them hope to get away with paying you nothing or nearly nothing. And so you might find that you're being offered equity, shares. Uh, but what does this all mean? And is it something that you should do? So that's what we're going to look at today. As always, check out dcx.to for links to everything in the Delta CX Hive multiverse from my coaching and books to our free Patreon, free Discord community where this topic first came up. Um, follow on Twitch and YouTube. Um, all the links are there. So if you're curious, cat, go check them out. Um, so I work today on writing some notes down for this uh session, and I'm gonna crack those open. Oh, Anna Lucia says, I've also seen established companies offering shares as part of a compensation package. To be honest with you, I don't know what that means. Great, we're gonna talk about all of that today. Um, I have I had one job many years ago that offered me shares, but I left before they vested, and we're going to learn what that means also. Um, please note that everything I'm talking about today is out there in the universe. I didn't make up any of this. I'm not going to use any special terms that I invented. You can always dig in deeper with all of this stuff and learn more. And as always, please make sure you are working with appropriate professionals for your region. Um, business relationships and contracts need good lawyers who understand business relationships and contracts. Do not make a handshake deal, as we say, do not accept an email as some sort of contract for employment. And depending upon what's going on, you might also want to talk to an accountant because they will have a better idea of what you have to declare with respect to income based on equity or shares or other things. So please know that anything I tell you or you find in a search or AI tells you, it does not replace the wonderful help you will get from a properly qualified lawyer and or accountant. So today we're going to talk about uh all the details to understand when there is a potential job that does not plan to just pay you for your work, because typically a job gives you a salary where you are getting a certain amount of uh pay per pay period, or perhaps you are a contractor or a freelancer where you might be pay being paid per hour or uh a fixed price for a particular contract. When we go outside of that, very often we run into things like, well, I'll offer you equity, or I'll offer you shares, or you'll get a percentage of the revenue, or you'll get a percentage of the profits, or you'll get a high title. It will be so great for your career if you are the co-founder or the um queen or king of something, or the director, the vice president, the chief something officer. So, um, and of course, once in a while you might get a uh startup or a company that tries to convince you to accept little or no money by trying to say, well, you're passionate about this topic or this audience or solving this problem. You're living out your values if you come and volunteer for us. And I just want to warn everybody to take some time to get in touch with your values because it's okay if your values include being paid for your work. So let's talk about, let's start with uh what is equity? Equity is a promise about a future event. It isn't money. And the question is, what is it worth? What does it mean? And that's something you would have to work out with that particular startup or company or founder. What is the equity? Very often equity means, oh, um, you you'll own 50% of the company, uh, you'll own uh you're a co-owner of the company, you get 30% of the company or something like that. This should be in the contract. And what does that mean? Um, can you sell that stake in the company? Um sometimes there's a contract that says you can't sell it, it's yours, and if you don't like it, you just have to walk away. Can you sell it back to another co-founder? There's lots of things to clear up when someone says, We're going to offer you equity. But just know um that if you are not also getting paid a salary or something hourly or daily or per project, this is not a paid job, and equity is very often not worth anything later. It's a percentage of something we all hope has value in the future, but there's no guarantee that there will be that value or that you can cash this out or sell it. So be very careful when people use these words. Let's often talk about let's also talk about what's the difference between stock options or equity. Because sometimes you might hear these words used uh interchangeably. You might hear uh stock options, shares, equity. So let's talk about what this means. Equity would mean you have actual shares in the company, either because you've been given shares or you're being told you are going to be a uh partial owner of whatever this company is. So again, someone might say you own 1%, you own half a percent, you own 50%, whatever the number is, that has to be properly put into a contract. Um, and then there's lots of questions that we'll talk more about today, like, do you get to make decisions? Do you get to vote on stuff? Or are you just a quiet owner while somebody else makes decisions? When you hear stock options, the keyword there is option. That means you're not getting stock right now. It means that if something happens in the future where the company seems to have value and it's going to be bought or the company is going to go public, like going onto the stock market, at that point you would have the right to buy shares at a predetermined price, which would be in your contract, and that's called the strike price. So right now you don't own any shares, but here's an example. Let's say uh a company is very early in its existence, and they say um you have the right to buy up to a certain number of shares in the future, and you can buy them for one dollar each. Cool. If that company gets bought or that company goes public, you can now use that price that you can now kind of cash in on this arrangement that you've been offered. Let's say the company goes public and shares are selling for $10 each. You have the right to buy that stock at $1 and it's now already worth $10. So that would mean getting in early in that company with an arrangement like that could end up being one of those ways where people make money. You have the option to buy stock, you exercise that option, your shares are worth more than the discounted price you were offered, and that difference is your gain if you were to sell those shares. And if you're allowed to sell those shares, uh sometimes companies say, Well, you can buy the stock, but you must own it for at least one month, three months, six months, a year, whatever it is. So they don't want people to just take over the shares and then all sell them because that can affect a stock's price. Also remember that stocks go up and stocks go down. If your strike price is five dollars a share and the company gets on the stock market and it's ten dollars a share, and you are holding on to that stock, or you have no choice but to hold on to that stock, and it drops below the five dollars a share that you paid for it, you lose money. Uh, you know, this is just the same thing that would happen with playing the stock market. The only difference is you are being given an early option to buy a certain number up to a certain number of shares at what's usually a price that is lower than what the initial public offering is going to be. Um, and we don't know if there will ever be an uh an IPO or initial public offering. We don't know if this company will ever be bought or traded on the stock market, and so only accepting payment as uh stock options and things like that is risky because it might end up being nothing. We also have to find out, and this is where you might want to work with an accountant, if you have stock options or stock, at what point does the region or country where you live consider you to own that stock? Because once you are considered to own the stock by your company's your company, your country's revenue service, you're gonna be taxed on that. You could be taxed on an investment, on the value of that investment, on any dividends you received from that investment. So these are are some things that you're going to want to find out, and usually that might be more for an accountant than a lawyer, but some lawyers specializing in these types of deals might have that answer. Um, also, you have to figure out um, is there a time limit in which you can exercise that stock option? And what happens if you leave the company? So there's still a lot of details and moving pieces here where again you don't want to just agree to something without deeply understanding it, without someone explaining it to you and explaining the pros and the cons. Now let's talk about shares vesting. Um, this is a common term. I didn't make it up. You can look this up. Vesting usually means that you don't get all of your shares right away or just because you joined the company. You are being offered shares, but you get them over time, and that's usually an incentive for someone to stay at a company. So someone might say, Um, we are going to give you uh a thousand shares in our company, and again, a thousand shares compared to what? How many shares exist? That's something else you want to learn. A thousand shares out of ten thousand, not bad. A thousand shares out of a million, not as good. A thousand shares out of ten million shares. So just because someone says shares to you, you're listening for a percentage or you're listening for how many shares and the total number of shares. But we're going to talk more about types of shares later because this gets even more muddy, which is again why you do want to work with lawyers and accountants here because they're going to have to explain this to you. I can't tell you what any particular deal is offering you. They need to see that deal and make sure that contract represents it well. So let's talk about vesting. It sounds like investing, but it's not the same thing. So, very commonly, you might uh it might say, um, and uh you're going to get a thousand shares. Maybe they're publicly traded on the stock market, maybe they're not yet. You're gonna get a thousand shares, but these vest over four years. And there might be a cliff, uh, a one-year cliff. So, what does this mean? The cliff means if you leave or are fired within that cliff period of time, you get nothing. So, for example, if someone says, Oh, you're gonna get a thousand shares over vesting over four years, and we'll talk more about vesting in a moment, but you have a one-year cliff. If they fire you in month 11 of your employment there, you get no shares. If you quit, you get no shares. You hit that cliff, your shares didn't vest, you don't get them. I once had a job many years ago where they offered me shares as part of signing on. They were publicly traded on the stock market, and they said, Well, you'll get this many shares after you work here a year, you'll get more shares after two years, more shares after three years. That's a common vesting plan. But what happened was my boss's boss was going after me. He was trying to set me up to fail and make me look bad, and he was trying to figure out a way to fire me. And so I decided before my first year was up that I would just quit. But my manager knew that this was kind of bullshit and that I shouldn't be leaving, and that his manager had some beef with me that really was inappropriate, and he was basically pushing me out. And uh, even though I was quitting, that and even though I had a good reason to quit, it still means I don't get those shares. And so, uh, and you don't really have a place you can negotiate from. You can't say, oh, come on, I deserve them, or come on, my my manager's boss is being a jerk, or hey, I'm leaving because of this bad work environment. The contract says what the contract says, and if it says you get no shares until you complete your first year there, then you get none. If you can stay one year and a day, or whatever the contract says, you can get those first year of shares. But what can you do with them? The contract has to say. So you, you know, maybe uh you get the first uh, maybe you get a thousand shares and you get 250 shares for each year that you work there for the first four years. So you stay there 13 months, you get 250 shares, you quit or you're fired, you have 250 shares. But remember, sometimes in these deals, you are just fired or laid off or let go or terminated in some way. And uh yeah, the rug can be pulled out from under you, as Anna Lucia is noticing. She says it could be a whole load of nothing because they pull the rug. And again, that's why you have to check what your contract says. If your contract says that your shares don't the first year of shares don't vest until you are there 12 months, then in month 13, you get your first year of shares. But maybe you don't get the second year of shares until you're there, you know, in your month 25. So, yes, it's another way where a company can avoid giving you shares if they want to do that for some reason. So, again, note the way the contract is worded. If it says you don't get these shares if we fire you or lay you off or terminate you, or if you're you you no longer work here for any reason, then you get no shares. So be careful of vesting and cliffs and these time periods, since it can be very deceiving, especially if someone says, Oh, yeah, you know, I'm gonna give you 20% of my new company, um, and that's gonna vest over four years. And, you know, so in your 13th month, you'll get a fraction of that 20% in builds. Just be careful. These are usually not great deals, but these are the offers, and it's a bit of a gamble, and you would decide what you want to do. Next, I want to talk about dilution. Again, another common term that you can uh research more about if you are a curious cat about all this stuff. So let's talk about dilution. Let's imagine that Debbie starts a company, and Debbie creates 100,000 shares in the company, and Debbie owns all 100,000 of them because it's my company. And I decide I'm gonna bring on Anna Lucia, and I don't want to pay her crap, so I'm gonna offer her some sort of percentage of the company, and I might say, Ooh, you are going to get 50% of my company. Um, and and here you go, you've got uh there's a hundred thousand shares, or maybe you get 49%. Okay, you get 49,000 shares. I'm the majority owner, it's really my company. You get 49,000 shares. Well, what type of shares are these? Can you vote? Uh, this is where you have like common stock and preferred stock or different classes of shares. Again, it's not worth me going wildly deeply into this because you can research it more if this comes up for you. But note that there are different classes of shares. And this is important because this is where this is where dilution comes in. And what dilution means is let's imagine that Debbie has uh a company, there's a hundred thousand shares, Anna Lucia has 49,000, I have 51,000, we are partners in this company, though. I own a little bit more, I have a little bit more say or control. Let's say we get an investor, and the investor says, Well, uh, we want um 500,000 shares, and we want them to be of a better class. We want preferred stock, we want certain benefits if the company is sold, if the company uh goes public. And then what happens is there they have a different class, not only do they have a different class of stock, but now Anna Lucia and I have been diluted. Anna Lucia owns 49,000 shares out of a pretend 600,000 shares. Let's say the new investor had me create 500,000 new shares, and maybe they get maybe they get 400,000 of them, and then we're gonna put aside 100,000 shares to offer future employees. Okay, cool. I'll just get out my calculator right now, and I will do 49,000 divided by 600,000 on Illusia went from owning 49% of the company to owning 8.2% of the company. Did you see that? This happens all the time. This is really, really common, especially in startups. When that startup gets some money and the people who invest get shares, everything changes because usually new shares are created, and that then dilutes people. So when you see these companies that have seed money and series A, and series B and series C, many times, not necessarily. Always, but many times new shares are being created. Anna Lucy is now upset that she only owns 8.2% of my fake company. Wait, what? That's absolute fevery. Yeah, it's not fevery. This is allowed. This is what goes on out there. I had a startup in Silicon Valley in the early 2010s. We had an investor come in and invest $75,000. And I I don't remember what percentage they got, but I also had to give a percentage to the incubator that I was in, the startup incubator. So when you hear about Y Combinator, they take a piece of it. They help you find an investor, the investor takes a piece of it. Everybody's got their fingers in all of these pieces. And what sometimes happens is people say, oh, we need we need more shares, or oh, this investor wants a certain class of shares that we don't have. We have to create more shares. So that gets dilution. That gets diluted. And it also means that different classes of shares have different liquidation preferences. And again, I'm not going to go deeply into that. If you want to learn more about this stuff, you can absolutely search this online or ask an AI to explain to you dilution and liquidation preferences. But wait, there's more. I've got a lot more notes for today, so keep asking your questions. Now we're going to talk about term sheets. The term sheet is usually the initial document between a startup and one or more investors. You may or may not see it, depending upon what your role in the company is, but it's almost like an offer letter, and it says, okay, we would like to invest in this company. We want to give this much money, and we expect to get this percentage of the company, and we expect to have voting rights, and we expect certain liquidation preferences, uh, blah, blah, blah, blah, blah. And that's that lives in the term sheet. And so remember, the important thing here is depending upon your role in this startup or company, and depending upon what your contract is with uh the founder or co-founders or executives or whoever, you may or may not get to see the term sheet. You may or may not get to know that there are potential investors. You may or may not get to vote on whether or not we work with that investor. And so um there's uh and all of this, the term sheet stuff and the liquidation preferences and the dilution make all of this very slippery. So I had Claude write an example for me. I'm gonna read it out loud. I have to admit it's a little confusing, but again, it's the kind of thing you can research further if this comes up. Um, Anna Lucia says, wait, this really hurts. Imagine you open a company with a friend, you're doing everything you can, it's your precious investment, and all of a sudden you can be turned into someone without power, even though all of that was your hard work. Yeah, that's why you have to be very careful with what kind of terms on the term sheet you have with your investors. Sometimes they're expecting a low stake in the company, they expect 5% ownership. Sometimes they expect a high percentage. People who watch shows like Dragon's Den will sometimes see a potential investor say, Oh, look, I'll put a million dollars into your company, but I expect to be, you know, this sort of executive, and I expect to own half your company. And then it's like, whoa, uh, do you want to make that deal? Uh so liquidation preference. Here's the example, Claude Route. Investors get paid first before common shareholders. So, what happens is if Anna Lucia didn't play this right, and she has common shares in my fake company, and now I have an investor and I've given them preferred shares, a better, higher class of share, and maybe they have a liquidation preference. And the liquidation preference only comes into play if there is a liquidation event where the company is bought or goes public. So, what does the liquidation preference mean? It means the investors get paid off first. So if the investor says, I'm putting in a million dollars and I expect this percentage of ownership and I get a 2x liquidation preference. That means that investor that put in a million dollars gets 2x. They get 2 million. What if you've got four of those investors who put in a million each? Maybe you have to pay them first, 8 million, whatever it is. I remember in the old days, investors used to ask for 10x. I don't think that happens as much as it used to, but it that used to be a thing where someone would say, Look, I'm going to invest a million, and if your company sells or goes public, I expect to get 10 million out of that. Well, what happens if you sell for 11 million? Now that investor gets 10 million, there's a million left, and everybody else has to now fight for those scraps. So the type of shares matter, the liquidation preference matters. Um let's see, Claude also made a note here. Um, if you have participating preferred shares, after getting your liquidation preference back, some investors also get to participate in the remaining proceeds along common shareholders. It's called double dipping, but it can happen. Investors get their money back. So I I put in a million dollars, I have a 2x liquidation preference, I get $2 million out. Cool, I made money on my money. Oh, and I also have a percentage of the company, and now I'm going to take money for that also. Um, because I have preferred stock, I get to do it first, and then employees and other people start to get a percentage of what's left. Sometimes you can write up a contract with a clause that is anti-dilution. So you can try to say, hey, no matter what, I don't get diluted. I always own, let's just call it 30% of the company. If you have 100,000 shares, I've got 30,000 of them. If you have a million shares, I have 300,000 of them. I do not get diluted. But again, that has to be in your contract. If it's not in your contract, don't assume that you you get that. So uh look out for all of this dilution stuff. And again, there's more things to understand about shares. I mean, we talked about liquidation preference and preferred and participating preferred and um conversion, there's so many other things. So, and then there's cap tables and term sheets. It's a whole, whole world out there. You could take a whole course on it, I'm sure. So if this is something that you are considering, either considering doing because you're creating a startup or considering doing because a startup is making you some sort of offer, these are all of the questions to ask. But wait, there's more. How about liquidity? How do you cash out? Let's say Anna Lucia owns 30% of my fake company and we have a fight. She doesn't want to work with me anymore, she wants to sell her 30%. Can she? Who can she sell it to? How does she sell that if we're not a public company and these are privately held shares? Can she sell it to anybody? Can she sell it to Jared Spool? Can does she have to sell it back to me? Because that's what our contract says. This means that again, this is just another thing that has to go into the contract that says, if you have these shares, here's what you can do with them. Um, I'm checking my notes now. We did talk about making sure you work with an accountant to try to figure out uh what you are being taxed on and when. When do you uh when are you considered to own these shares? What value do these shares have? If Anna Lucia owns 30% of my fake company and my fake company hasn't sold anything yet, what's that 30% worth? A dollar? A hundred? A million? How do we know this? And then can she be taxed on the value of owning 30% of something that has some sort of value? Or in in a particular region, is she only taxed if she sells some or all of those shares, the way you're taxed when you sell any stock that you own? So uh be careful. Some countries will tax you even when you haven't sold the shares, but just because you own the equity and it has value, and they want you to pay tax on owning something of value. So, again, important to talk to a uh lawyer and an accountant, probably both. Uh, the this is really important. Um, next, new topic. What if a company or startup says, hey, look, we really can't pay you, but we're gonna offer you revenue sharing, or we're going to offer you profit sharing. These aren't the same things. Revenue and profit sound like they could be similar or close, but they're not. Revenue sharing means you get a percentage of the money that comes in, the income, no matter what your expenses are. If I make a million dollars and Anna Lucia gets 10% of that because we are revenue sharing, she gets $100,000, even if the company loses money, even if things are messy. Um, and then of course, how would you know how much money is coming in? You would have to make sure your contract says you have the right to see the company's financials, you have the right to look at the books, the bank account, whatever it might be. Otherwise, this is the honor system. Lucia says profit is revenue minus losses, right? So it's very different if someone says, look, you're gonna get a share of the revenue. When we bring in a million dollars, you get 10%, you get $100,000. Now, what if it's profit sharing? Especially in America, very often the first few years of a company are losses. You are spending more than you are making because you are building something and you hope it pays off later. 90-ish percent of the time it doesn't, but in some sort of hypothetical universe, I could say to Anna Lucia, hey, you get 10% of profit. So let's say the company brings in a million dollars. Anna Lucia might think, ooh, I'm gonna get $100,000. No, you're gonna get 10% of the profit. If the company shows no profit and it shows a loss, Anna Lucia gets nothing. Big fat nothing. If the company shows ten dollars of profit, Ana Lucia gets one dollar, and she'll have to pay taxes on it. So um please remember that uh it is better to get revenue sharing than profit sharing, but you're still going to need obviously not only all of this in the contract to understand what percentage is this, how often are you paid? Is it just once a year when we do our taxes, or do we are we checking our revenue monthly, quarterly, or something else? Do you have the right to look at the books, the the bank accounts and sales figures and other things? Um what is how do you define revenue? Um, is it gross? Is it net? Is it everything, or is it only something? Is it revenue uh based on a change? I I've seen, I remember Dr. Nick posted a few times on LinkedIn saying like he was willing to do work for free for a company, and he he believed he would make so much change in their finances that he would only charge a percentage of the change. Let's say a company made $10 million last year, and Dr. Nick thinks he can get them up to $50 million, and he says, in return, I want 10% of what? The revenue, the change in revenue from last year, the profit? Like these are all things that if Dr. Nick or anybody did something like this, has to be spelled out in the contract. Maybe Dr. Nick can take a company from 10 million in revenue in one year to 50 million in revenue in the other year. That's a jump of 40 million. Does he get a percentage of the 40 million? Does he get a percentage of the profit, which could be nothing, or much less than 40 million? So again, all of this has to be in the contract. And sometimes there's a minimum or a guarantee. Like, hey, we might have some slow months or slow quarters, you're still going to get $1,000 minimum or 10% of our revenue, whichever is greater. So that's another example of the type of agreement that someone might offer you. Anna Lucia says, most people don't even know that companies have things that depreciate over time. That ends up being shown in the losses. Reading balance sheets is one of the most mind-boggling things I had to learn because logic doesn't apply. Yes, that's true. There uh certainly in uh many countries, you are often depreciating something that the business owns over time. Uh, for example, I think when I think of my American taxes, I think of furniture and computers. If you buy a thousand, a $5,000 computer, you are not supposed to write that off as an expense the year you got it. You're supposed to write off a percentage of it one year, a percentage of it the next year, percentage of it another year, etc. That's depreciation. So, yeah, lots to know about that. Um, next, let's talk about when a startup or company of any size offers you a fancy title. They might say, Hey, if you come and join this startup, we're gonna make you a co-founder, we're gonna make you the head of UX, we're gonna make you the chief product officer. Cool. But what's really going on here? What do you own? What are you paid? All the other things we've already talked about still have to be in the contract. A fancy title is just a fancy title and might come with no power, no decision making, no shares. I mean, it could just be a fancy title. Someone might say, Oh, we want you on our board. That might still come with no pay, no shares, no power. You have to check everything. Like five years in Portugal. Yeah, you basically depreciate things down to them technically having no value. So, whenever you hear that you're gonna have some sort of fancy title, you want to know do you have voting rights in decisions the company is going to make? What decision-making power do you have at this company? Um, if you are going to have a percentage of the company or you're going to be a certain uh level of leader or executive, are you on the corporate documents? Are you going to be listed as a corporate officer? Uh, in some states, that means that the company has to pay for your worker's compensation. Um, do you have signing authority? Can you sign contracts? Do you have access to the bank account? Are you on the board? So be careful because sometimes these things are uh fancy titles with no power, no voting. Uh the Discord people know that I recently quietly left an organization I'm not naming because they wanted to bring me in to be the co-director of an initiative. And I was like, all right, that's fine. But what I ended up finding out in just a couple of months of trying to work on this initiative was I had no power, I had no authority, I was not able to make decisions, the founder was doing all kinds of things without even telling me. I would find out later that this person was calling people, trying to make partnerships. I I was a leader in name only. I couldn't do anything there. There were things that I was against that I said we shouldn't do. No, he he wouldn't talk to me about it. So that was, to me, that was a fake position because ultimately I couldn't do anything. I really had no power or authority. Anna Lucia says, Would you say it's better to start a company, either alone with friends, and try to apply to things like European funds instead of bringing in investors, since the funds can be used for salaries? And again, that's going to be a good question for lawyers and accountants. What should you do? If you get a grant that you don't have to pay back, or a loan that you don't have to pay back, or an investment that doesn't come with shares and liquidation preference or whatever it might be, if money is just coming into this business, who controls it? Where does it go? Who makes decisions about it? And so even if you're starting a company with friends or family, which is usually not great, but even so, you still want a proper contract that says who decides on what and how are things decided. If I say, hey, Anna Lucia and I are partners in this new company, but maybe I write into the contract, Anna Lucia doesn't get a vote. When there's a decision that has to be made, it's just what I want to do, and she gets no vote. That's possible. It seems unfair, it seems wild, but these things happen, and people get surprised when they don't read the contract and they find out I can't even make a decision here. So these are things to know and to remember that sometimes a startup is making some sort of unpaid offer to you because they assume people are desperate and that they'll take anything, including doing work for free with the unknown future promise of something. Um, they might tell you, oh, but you're passionate about this. You can live out your values, you'll really network, you'll upskill, you'll, hey, look, they if this is really that great, they shouldn't have to sell it to you with these weird promises, especially since unless they're in the contract, they might not come true. You might not upskill. Is it in your contract that you're going to upskill? Who's going to watch your work and train you? If it's nobody, you are not going to upskill. Um, and again, many of us might feel desperate about work and we might think, well, taking this unpaid startup is better than nothing. Is it? That's for you to decide. I can't tell you that. I can only tell you to be very careful. Now, you might say, but Deb, there are times where people got in early to a startup and they really got rich from that. Couldn't that happen to me? That could, but there's a reason why we don't know a lot of people who that's happened to. Because you would have to get in pretty early at a company to have a decent amount of shares that you either got in options that were very inexpensive or and you weren't diluted and you had a good contract and blah blah blah. Yes, if you if that happens and you have a great contract that says, Hey, look, you're you are employee number three here, and we you you get five percent of this company, and each. Even if we bring in investors, you won't be diluted. You will always own five percent of the company. And if the company sells for a hundred million dollars, if you've negotiated the right contract, you will be handed five percent of that. Five million dollars. So uh, but sometimes these things fall apart, and the contract says if you leave this job, if you walk away from the startup, if you quit or whatever, you get nothing. You you fall off the cliff, you get nothing. You you didn't exercise your options, or you don't get these shares, or whatever it is. So again, it all comes down to how your contract is written because people can make all kinds of promises, but you're only gonna know when you see what's in the contract. Anna Lucia says, I don't know if they had their own personal investments, but for example, Sandfall Entertainment, the ones behind Claire Obscure, basically relied on European and French grants and funds. And I think it was the kind of funds they don't have to pay back, they only had to apply and deal with bureaucracy. Sure, but then if you're an employee, then they hopefully have offered you a salary and you got paid your salary. What if you are a co-owner or co-founder or chief marketing officer or a shareholder or an investor or something? Maybe they didn't have investors, but they probably have leaders. And the leaders might own shares, and those shares might mean nothing if this company doesn't sell or it doesn't go public, or maybe you can't even be part of decision making. So, again, the the source of investment or grants is interesting, but you still want to see what how this what does this mean for you? So uh an early employee can get a salary, might get equity, you can get both. Nothing says you only have to get one. Someone might say to you, look, uh, I'm gonna pay you a salary, I can't afford too much, I'm gonna give you um forty thousand dollars a year, but hey, you're also going to get three percent of the company, and you might be diluted, or your contract says you won't be diluted, um, or you're going to get three percent with this vesting schedule. Again, all you can get multiple things. I hope all of them got monthly salary. I hope so too. Um, you the offer could have multiple elements. It could be you get a salary, and you get equity, and you're on the board, and you have certain decision-making power, and you get a certain class of shares. All of this is just depends on the offer people make. And Lucia says, so if a company offers you equity or shares along with your salary, your advice would be to check in with a lawyer and or an accountant. Uh, yes, if you don't know what it means to own those shares, because uh when do they vest? Do you understand that? When they vest, you already own taxes on them because they're now an investment. You own shares in a company. Uh for some regions, you might already owe taxes, others might not expect you to pay taxes until you sell those shares. If you get those shares, can you sell them? Can you sell them on the open market? Or are you limited to who you can sell them to? Is there an amount of time in which you can't sell your shares? So the reality is that while some people who are early employees of startups that end up being bought or uh acquired or uh go public and are traded on the stock market, yes, sometimes those people do well or incredibly well. Um, but very often there are people who are working for or with a startup with all kinds of promises of titles and shares and things, and they end up with nothing because that startup never is successful or or keeps showing a loss quarter after quarter or year after year. So it's up to you. If somebody says, hey, will you take just equity? You might say, Hey, I can't work for a future promise that this might someday be worth something. What is the value of your company? Equity of what? If I start a new company right now and I say, ooh, I'm gonna give Anna Lucia 10% of it. 10% of what? So this all has to be clear and understood and explained. And if you're not familiar with it, you do want a lawyer and you might need the accountant. And you can say no, and you can negotiate. You can say, Well, I would like to work here, and sure, I'm passionate about this, but I should be paid. I don't want to do this as a volunteer, and I don't want to do this for an unknown future promise that might end up being zero. So, you know what? I would like to get uh this money as a salary, and I would like to have these benefits, and I would like to have this voting or decision rights. You you can negotiate this. Now we have a bit of a real-world example because we had a we had someone join the Discord community the other day, seemingly to just post a job. They haven't even responded to us, and I don't expect them to, but I'm going to read you what they wrote, and we're going to burn it to the ground. Uh, and don't forget to ask any of your questions because this is pretty much the end of my notes, and then I'm going to wrap up. Um, this is what the person's posts in our uh jobs and hiring channel said. We're replacing resumes with proof of work hiring. Engineers prove skill on real challenges, get hired on evidence, own design like you will, own design and product end to end. No handoffs, no briefs, you decide how this works. Need shipped real products, systems thinker, PM instincts, comfortable in ambiguity. Why does everybody always say that? Two-sided platform experience, equity only, revenue sharing, founder level ownership, send your portfolio and what you'd fix about hiring today. This matters more. So now let's break this down. Proof of work hiring sounds like you're going to do free work for I don't know who for this startup to say, oh yeah, Anna Lucia is a good researcher. She did this work, and we can prove that she did this work well. What problem does that solve? Who needed that? Uh, then it says, no handoffs, no briefs, you decide how this works. Sounds like they've got no process. And if it fails, it's going to be your fault. Then, of course, it says comfortable in ambiguity, which means to me, we have no strategy, we don't know what we're doing. We need you to figure it out for us, and you're not going to get paid for it. Then, of course, we have equity only revenue sharing, which is weird because once you've got requir revenue sharing, it's not equity only, it's both. But um neither is immediate money. Um, oh, Ana Lucia says it's a big flag when they ask you to fix real issues the company goes through, they're likely using that to get free work and no one gets hired. Also true. We've talked about that before. And I think we have a show coming up on that, or we just did one. I have to check. But about how the uh when the job application is the free work. I think we did that show. It's uh one of my medium articles. Founder level ownership. This person is promising. What does that mean? Do you really co-own the company? Are you a co-founder? What percentage of the company do you own? What does that mean? What can you vote on? What can you decide? Can you be diluted? All the same questions we've had through the last 20 minutes. Send what you'd fix about hiring today. Free consulting baked into the application process. So uh I wouldn't apply to that. Do I qualify for that? Yeah, sounds like they want me. Am I applying for that? No, I get paid to do this work. I'm not doing this work on the promise of some weird future. Maybe I get a thing. So what are what are the key things you need to remember when you are in these conversations or getting this type of offer or seeing people post this to LinkedIn or communities? Number one, get everything in writing. And excuse me, number two, remember that that offer in writing needs extensive detail. It can't just say founder level ownership. What does that mean? Revenue sharing, what percentage of what? Equity, what percentage of what? And when? And what can I do with that? And can I sell it to anybody? And will you put all of this in writing? And if they won't put it all in writing, that's just another red flag. Red flaggedy flag, flag, flag. Um, so that's a oh, excuse me, I'm ready to go to sleep. That is the long version. We've been talking for almost an hour. That is the long version of the things you need to understand when somebody is offering a job that doesn't pay, but isn't just a straight volunteer job, like, hey, please do this work. We're giving you nothing. That's nothing. This is we're giving you something, but if it's not clear, it's not clear. And you have to get in writing. What does any of this mean? What can I do? What can I not do? What power do I have? What power will I have in the future? Uh, can I vote on stuff? What can I decide on? Uh what when do I get money? Uh, what can I what do I have the right to sell or not sell? All of these are really important and require conversations. And and then once you have the conversations and everybody's agreeing, then we need a contract. All of this needs to be in writing, not just some of it. And you don't want vague contracts that say, well, we'll decide that later. You'll work for six months and then we'll decide what percentage of the company you get. No, because according to that contract, that number could be zero. And who decides that? And how? So you always want to make sure contracts don't have vague things, and that contracts don't have weird future, we'll figure it out later type of promises. Andalucia says, you know what? I want a salary, I can't pay the electric bill with equity. That's very true. Ultimately, a lot of the things we talked about today are essentially gambles. You are gambling that the percentage that you own of this company someday is worth something. And does that happen? Sure. Sometimes that happens. Does that sometimes happen big? Sure. Sometimes people really hit it big. But most of the time, you don't get anything. And if you go into a job that is only offering these future promises or equity or shares of something that will only matter if the company is bought or goes pub, excuse me, goes public, it this is this is between you and you. You are working for nothing. You are agreeing to work for nothing, and it's a gamble, whether or not this is someday going to be looked at by you or anybody else as an amazingly smart move that you did. Or if somebody is going to look at it someday and go, wow, you worked all of those months or years for nothing. And that's the bottom line is we don't know how this will go unless this company is further along. Maybe they already got some investment, maybe they already have paying customers, maybe it's looking pretty good. That might factor into your decision at all as well. Hey, there are already investors, but hey, they're making money. Hey, they seem to have product market fit. Hey, they're really going somewhere. I remember I had a job interview during the pandemic, and the person said to me, uh, oh, I don't think we can hire you. We need everybody to be in Netherlands, Spain, or Germany. And I said, Well, I'm in Italy. You know, that's the EU. What's the problem? And they said, No, because we would give you shares in the company, but we can only give shares to people who are in Netherlands, Spain, or Germany. And I said, Well, then who cares? Maybe I just want the job and I want what the job pays because there was a salary. Maybe I just want the job and what the job pays, and let's forget about shares. And the person was like, Oh no, you're going to want shares. So my thought was, okay, this person knows something. This person knows maybe that this company is trying to be bought or likely to be bought or going to go public, or something is coming in the relatively near future where shares would have a value and I would benefit financially from having shares. But in the end, I wasn't willing to lie about living in another country and pretend I lived in Netherlands, Spain, or Germany. Uh, and I did not continue in that process. That person probably shouldn't have told me that, but hey, people tell each other things. So uh thank you for hanging out with me for an hour uh or maybe um uh half hour at 2x. Uh, but I greatly appreciate you being uh involved and uh really quick show notes since uh I'm starting to do a uh an alternate schedule. So each week we'll either have a Tuesday show or a Wednesday show. So this week is Tuesday, no show tomorrow. My show tomorrow will be on my vocal coach Debbie channel. Um I'll be talking about microphones. I hope you'll check that out. Um next Tuesday, no show, but we will have Ask Me Anything uh on Wednesday, the 22nd. Um, Dr. Nick couldn't come last week, so he's coming next week. And uh I will also be doing a vocal coach Debbie stream after the Wednesday show. Um, and so on and so on. Oh, yes, okay. So it's Wednesday, July 28th. We're gonna talk about uh my article that I just referred to, where I said um where uh it's the article I wrote about when the job application is free feedback or consulting work. So uh this episode and that episode are going to be cousins. So remember, 302 and what will be 303. Um uh I'm gonna wind everything down. We'll play our wrapping up music, and I hope to see everybody tomorrow at the Vocal Coach Debbie stream uh or next week at the Ask Me Anything here on Delta CX Hive. Thanks, and have a super rest of your day.