Joining a new startup - how to structure compensation?

[NYC]

An existing company that recently began production of a consumer item has asked me to become part of (or work with) their 3-4 person company and be responsible for marketing, promotions, brand ID, etc.

Originally I was hoping to be the exclusive distributor for the product in my region, thinking I could make a healthy profit on every item sold via brick and mortar outlets, and in exchange give them all the marketing and promotion I create to drive the product on a national/international level.

But now they are thinking of using a national distributor, and are looking to fold me into their organization (at least from a compensation perspective)

How would I go about structuring some kind of compensation? They are looking to me for input.

They don't have money for salaries now, but have created a product that people are going wild with anticipation with on message boards and presales.

Would I ask for profit sharing, and if so, for what period of time? I could help these people market a very profitable product, and then within a short time (1-2 years) find my services no longer needed once they can hire someone or a firm for a flat fee.


Any guidance appreciated.

[lawinc]

Be prepared to discuss compensation. Odds are that by working for a startup you will be making less in cash and other compensation than if you went to work for a more mature company. That's partially offset by a "lottery ticket" in terms of equity options, but I'd argue that the best reason to take the hit is for psychic reward. That aside, you should familiarize yourself with vocabulary and mechanics of stock options. There are a ton of resources on the web. For senior positions in a startup, there are some really good comparable available in this study conducted by Prof. Noam Wasserman at HBS. Everyone has a different strategy on this, but mine is to be straightforward and, when asked about compensation, to respond, "here's what I need to keep the lights on." If you and the company do well, then you'll certainly be making a lot more in a short period of time so haggling over a few pennies up front is really not worth it.