am I a job candidate or a free consultant?

by Alison Green on November 21, 2011

A reader writes:

I was contacted by someone for a job opportunity for the business he’s planning to start. We spoke on the phone several times, during which he asked my advice on some aspects of his business that are in my area of expertise (and I gave him some, which he seems to have valued). He has indicated that I will be given a very good position when (if) the business gets funding, which is looking likely, it seems. (He’s included my name and credentials in a prospectus he presented to investors; we have talked about the title I would get, and the ballpark salary.) 

I am finally meeting him in person later this week, and I wonder how I should proceed. Can/should I ask for something in writing that outlines/guarantees my position in the company? I worry that he’s using me as an unpaid consultant and that my position may never materialize, even if the business goes ahead.

I’ve done some research on him online, and he seems legit. He’s started businesses before, sold an early business to a big-name company, and some of the people who are associated with him in this venture have worked with him in past businesses (to me, that’s an indication that he’s trustworthy). 

I have a job now, but it’s not in the field I love, and this would be an amazing opportunity to not only return to it but to go back in a higher position than the last one I held in my field (and with equity in the company — we have already discussed that, too). I have never worked for a start-up before (but at large public companies), so I wonder if this is normal procedure for start-ups? Or if I’m being played? And how can I protect myself from the latter without jeopardizing my chance at what could be my dream job?

Well, some of the best job interviews are where the candidate actually shows how they’d do the work … and that’s exactly what you have an opportunity for here.

However, you’ve got to put reasonable limits on it. It’s one thing to talk over strategy and ideas with him. It’s entirely another to actually start doing consulting work without being paid.

But sharing general advice is something that consultants do free of charge all the time. It’s one of the ways they end up with paying business, and before most people will hire you, they want you to demonstrate how you think, how you operate, and that you know what you’re talking about. However, coming up with a strategy specific to this business or doing actual work of any significance (beyond simulations or exercises that smart employers use to see strong candidates in action) — that’s when you need to start charging.

Here’s my advice:  Go to this meeting and treat it like a job interview — share your ideas freely and don’t worry about pay at this point. Right now, you’re still convincing him that you’re the person he wants to hire. (The fact that he’s included your name in the prospectus and alluded to title and a ballpark salary doesn’t mean he’s sold yet. After all, you haven’t even met in person yet.) So it’s premature to ask for a guarantee of anything. You can, however, ask him what his thinking is for moving forward and what the likely timeline is for figuring out if a position for you makes sense.

But after this meeting, if he continues to reach out for advice, it’s reasonable to start setting some limits. At that point, say something like, “I’d love to keep talking with you. Should we talk about formalizing things or setting up an hourly rate?”

Just remember to distinguish between conversations designed to help you both see if the fit is right and actual free work. There’s an important difference.

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{ 6 comments }

{ 6 comments… read them below }

  1. Nathan A.*

    If you are doing actual work for this guy, then you could be called a consultant (or a contractor). This falls under the idea that he has no intention of hiring you and would rather have an expert pick up parts of the business that require starting up and then have you bill him. I think, given what you two have discussed, you wouldn’t want to be referred to as a consultant, because that means you’ve done actual work for him and haven’t been compensated yet.

    From what you’ve indicated here, it looks like you probably talked some ideas out and gave him insight as to why you are the expert he needs. For instance, he may have asked how to put together a financial projection sheet that would pique the interest of investors – and you chime in and say that “X” would look good and give him a basic breakdown. This is just you flexing your knowledge muscle and showing people you have something valuable to contribute. If he actually had you put together the report, and he then gave it to an investor as part of a business plan, that’s where you gotta be worried about being short changed (because you didn’t put anything to paper in terms of your agreement).

  2. Charles*

    I would like to ask the question, “how did the reader find out about his/her name being used in the prospectus? Was the reader asked beforehand if this was okay? ”

    If I am not yet officially part of a project; then that project leader does NOT have the right to use my name and credentials. It is not only using my “property” without my permission; it is also misleading the potential investors if they think that I am certain to be on or come on board with this project.

    Sorry, but dream job or not this is a huge red flag to me. I would be very careful in my dealings with such an individual.

    1. Ask a Manager* Post author

      I think it depends on how the OP’s name was used. I wouldn’t have a problem with something like, “We’re in talks with Jane Smith about possibly coming aboard in a __ capacity.”

      1. Nathan A.*

        He may have just listed the OP as part of the staff with technical credentials as part of the management plan.

        1. candidate or consultant*

          this is the OP. that is correct — he listed me and my credentials as part of the staff for the management plan. i went to the meeting/interview and it went well (i met w/the CEO and 2 others). he wants me to meet w/a 4th member of the management team in december. so i guess i’m still on track for getting the job. and i like the distinction between giving advice and sharing knowledge and being asked to work up a report. that helps a lot. thanks!

  3. Wayne Schofield*

    I had a similar situation recently where I had been speaking with a person who I thought would be an excellent addition to the team and thought about promoting him for the business before the launch, but decided against it because we had not formalized an agreement. Even though I saw him as an integral part of the business we didn’t speak money until pretty late in the process. Starting a business involves many moving parts and this is one of them. Your comments and suggestions are right on. After the face to face….push for an agreement of compensation or just move on.

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