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My role as a contractor for a US firm is about to start on Friday and I also have another local startup company with an offer and don't know which to choose.

The US firm has done background checks, and it's a 9 to 5, M-F, indefinitely. They employ many freelancers and also local developers and appear to be financially solid. The other American startup company is different. I will be making more than the hourly rate the one first firm is paying, and will be working 9-5 M-F but for 3 months. They say that there will be more work after but it's just thin air as much as I hope so, it's not good enough seeing that they are a startup.

What should I do? I'm worried that although the startup company offers more money, it's hard to say whether they will actually follow through and who knows if after a month they will point to funding or not being happy with my work? It's a big risk. a bit more than I will make at the first firm, but this firm is more stable, and it seems like there will always be work but I don't know this 100%.

jmort253
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KJW
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2 Answers2

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It seems that you want to break the eggs, eat them scrambled, and yet to have eggs unbroken.

You have to choose between longer less-paid job and shorter double paid job. So you are scared to take change with a local start-up and yet not willing to work half money you can work with them.

Firstly, you have to check with the start-up if they can guarantee 3 months of work. Have them set that in the agreement that if they have less work, you are paid for 3 months anyway. Of course, you have to tell them that you are choosing between them and larger agency. So they know what you need 3-month guarantee.

If you set all this, and since they are paying double money, you should think of it like this: 3 months for them is actually 6 months for larger agency. So after 3 months if they break contracts, you still have 3 months to find another job and be on the positive side.

On the other side, does large agency guarantee you will work 6 months or more? Apply the same mathematics.

I would always chose longer project, even less paid as I can always ask raise. I also have pretty nasty experience of startups offering years and years of work, and them coming back to me after 2-3 months saying that they overestimated their efforts and they cannot pay me any more due to lack of work.

Peter MV
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  • I would also add to this of examining your life to see which one is better suited. Can you afford to be out of a job in 3 month's time? You need to determine if that risk is acceptable. – captbrogers Feb 19 '14 at 14:08
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I'm sorry, but this is the nature of contracting work. I don't know how the laws work where you are, but if a company offered me an indefinite contract of 9-5 work I would run a mile. That isn't contracting, that's permanent employment without some of the extra perks. In the UK, that would most likely be caught by IR35 (caveat: I'm not a lawyer but have been contracting for circa 5 years and have to understand about IR35 because it potentially affects me for every contract that I take) and you would be expected to pay full tax on your earnings exactly the same way as you would if you were permanent. The whole point of contracting on the financial side is that you are paid very well to offset the risk you take due to the role not being long term and having a definite end date. You are a specialist fulfilling a short-term business need that the client has, and they pay accordingly.

The concerns that the start-up have are very real and should be taken into account when deciding whether to take on that role. Start-ups are inherently risky as they are very volatile in nature and could have funding pulled or fold at any time so you have to decide whether the nature of the work and the fee you would command are worth the risk. In the UK, 3 months is a fairly common length for a contract but I would be very concerned if that contract contained a clause stating that they company would continue to pay me for those 3 months even if there was not enough work. One of the key indicators of being in business of your own account is mutuality of obligation and I would want to take legal advice to understand whether asking the company to continue to pay me for the duration of the contract even if there wasn't enough work would fall foul of this legislation if it is a concern in the US.

You have to decide whether to go for the risky or the safe option. If you believe in your abilities and experience and have the confidence that you will be able to get further contracts relatively quickly then you could choose the better paid option. If, however, you are fairly new to contracting then the more stable option might give you the opportunity to build up more money in the bank before deciding to go after shorter term, better paid gigs.

levelnis
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