I'm Joining a Startup as CTO, First Sales Hire Received More Equity?

Question

I'm in the process of joining an exciting IOT startup as CTO (most of my work will be software). I've had a good relationship so far with the founder, who's an ex-sales guy who actually managed a lot of the initial hardware development.That said, I've been working out my entry package (mostly stock at this point with a barebones salary until we ship v2 in a few months) and I realized that a sales hire younger than me (who the founder has complained about performance wise to me) has a larger equity stake than I do. I asked for 8% (at a $14M valuation) and they obliged, is this a huge red flag?Is this just a sales guy thing? I understand sales is what turns thin-air into money but their latest seed round would've been nil without my AI development.I feel miffed and I'm tempted just to look elsewhere. Also open to strategies how I can use leverage to increase this equity position.Cheers

Calcumater · Accepted Answer

They gave you everything you asked for. I don't see a reason for you to be miffed, unless it is at yourself. If someone else managed to negotiate a better deal, that's not a transaction that you were involved in or should concern yourself with. Perhaps the the founder is complaining about the guy because he isn't receiving the value from the sales guy that he feels he should based on what it cost him. If so, that will sort itself out, eventually. I'd ask myself this question, "Would I be happy with the deal I have if I didn't know about the deal the sales guy has"? If the answer is yes, then just stay where you are and work to make good things happen.

kkielhofner · Answer

Sales people negotiate for a living, including for themselves (of course).
Marketing people are really good at marketing themselves, their value, etc.
Technical people are good at building things, generally pretty poor at the above.
Cap tables reflect this and your story is all too common. You asked for 8% and they accepted. The sales hire negotiated for theirs, you didn't.

venkii · Answer

My 2c:- 8% or higher for a non-cofounder is very unusual. It&rsquo;s typically 1-3%. Your CEO is flying in the face of conventional wisdom - but that&rsquo;s not always a bad thing.- re: the sales guy making more - I think you just need to make peace with it. People often make more doing less, or doing less technical work. Companies certainly often have initial employees that are as crucial as co-founders but are compensated with 10x less equity.

mikece · Answer

Maybe it's just me, but if you're already concerned/complaining that someone else has a bigger slice of the pie -- despite you getting exactly what you asked for, apparently -- I have to wonder what else you're going to be upset about as things go on. Do current laws allow for the founder to fire someone for cause for making posts on the internet complaining about the company?

34679 · Answer

I recommend spending some of your $1.12 million on some psychiatric help.

cranberryturkey · Answer

the world ain't fair my friend. are you happy with your comp? if not re-negotiate it.sales is a necessity which many devs fail to see.