I bought the e-book a couple of days ago, and am finding it very informative, as somebody who was just approached by a very early start-up to be lead engineer and employee #4.
One gap in the book, however, is that it doesn't mention convertible-note financing. I can find loads of stuff on the Net about how that works from the point-of-view of founders and investors, but (going along with the theme of the book) none so far on how this affects negotiations by prospective employees.
For example, is there still a "pie" to be sliced up, even if it doesn't consist of real stock yet? Should one expect the same percentage offers, or higher? Obviously it's the problem of the existing percentage-holders to agree on percentage offers to new employees, but how does this even work when there isn't an option pool yet? Presumably when there's no option pool, dilution occurs due to both new investors *and* new employees.
What are the additional risks, if any, of joining a company still in that stage. My understanding is that the investors can still claim back their money if the company fails before it converts to real equity. Presumably that's an additional risk (and incentive) for the founders? Does any of that risk apply to non-founder employees, too?
Thanks in advance,