Reply to Husband wants to take a huge paycut to join a startup

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]

If he has the skills to develop a company, and you trust the team he's joining (no major personality issues), then I say take a leap of faith. You have done the financial prep work to make this risk possible. But you have to take control of the home finances and home front and keep him in line and prop him up. He'll be very busy elsewhere if he's doing it right. [/quote]

Startup person here. I sold my car and some other stuff and started mine with $25k. Now I make $1mln/year. Anyway, definitely look at the management team he'll be joining at the startup. Sometimes I see people eager to join any startup that comes along, just to do it, but they aren't always the right ones.

It's like a friend I had who came into some money and decided to become an angel investor. He was eager to invest in anything, including industries he had no experience in, just to do something. Those didn't work out so well. (lesson learned: engineers don't know much about the hospitality business)[/quote]

A 10% stake gives him zero control.  You husband needs to make sure how he GETS OUT of the startup.  If is his concern is about creating value for others, he's going right back into that.  He needs to be very sure how his partners plan on getting out, otherwise he may find himself back in the same spot.[/quote]

A 10% stake in a Series A company is huge! But 10% in a startup that hasn't taken any dilution is tiny. [/quote]

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