Hi,
My boss offered me 10% of equity in an LLC company. I don't know if the LLC matters or not, but I posted it just in case. I work for a small company that is starting to make good sales. I am wondering what this equity means to me. How do I get paid off this equity? Does he pay all employees and himself before he distributes the equity? Before I accept this offer, I want to know if it is going to be worth my while. The biggest question I have is, what if he spends all the money in salaries... 10% of nothing is nothing.
Thanks,
Brandon
You need to talk to a lawyer
This is more complicated than it sounds like. You really need to understand what obligations you might have, and what liabilities you could incur.
Generally, equity in private companies isn't "liquid" because there is no one to whom you can sell it. Offer terms can restrict how and when you sell. The legal terms need to spell out how your equity is handled in the event that other investors join (venture firms can often make your equity a much smaller percentage than you would expect) or in the event of an acquisition or IPO.
Really, talk to a lawyer who handles such things. Hey, you could also become rich! It's worth finding out what's really on the table here.
PM me if you'd like a little more info.
John Hack