What do you consider a founding engineer?

1) it doesn’t matter and really no one cares. Don’t wring your metaphorical hands over it too much, getting CxO title matters a lot more and even that doesn’t mean a thing but it at least makes it a little more painful to slot someone in above you.

2) if you’re not around when the incorporation docs are drawn up and filling out an 83b you’re not a founding anything. Just an early hire, and there’s nothing wrong with that, but don’t let yourself get into something that feels bigger than it is.

3) Equity doesn’t necessarily track with being early. There’s a correlation of course, but you can have someone join a startup right out of school and then not receive “significant” equity relative to the rest of the team if they’re not brining nearly as much upside to the newly formed company as an engineer with 20 years of domain experience who joins 3-6 months later.

4) I’d read it as the founders being non-technical and/or more like investors than operators. Be cognizant of that as you’re talking to them.

I haven't seen the term "founding engineer" used commonly, but my assumption is that a founding engineer would be a cofounder with equity comparable to the other founders. However, it seems unlikely that someone would place an ad for a cofounder, so you're probably right that it's just an ad for an early hire that's phrased in a misleading way.

I see it as talking about skill set not renumeration. The skill set differs from a normal engineer as it’s better to have a large breadth of knowledge and there’s more of an expectation to work hard and have a lot of ownership. In Australia it seems like the going rate of equity for early engineers is south of 5% and if you get in truly early stage then what you said makes sense.

It is an early hire but it doesn't have to be shares. It often has shares because a lot of these guys can't pay market rates.

10% is a little high. Even for a 3 founder startup without investors, it's about 33% each. "Founding engineer" isn't exactly a CTO or tech lead title. It sounds like position where you take a similar workload to the CTO, but at a higher salary, lower responsibility.

Contractor roles are common as a lot of startups don't want to deal with the legal implications of having a full time employee, firing costs, etc. It's easier on a low budget too, just to contract enough MVP and then spend a couple months raising the first round of investment, or marketing the product.

I liked contractor roles because the time/pay ratio is excellent and the risk/equity is as well. Do note that 90% of startups fail. Joining something with even 50% equity might not be a good deal, especially if you've never worked with the founders.