There are plenty of examples of entrepreneurs cajoling employees into working for little or no pay, sometimes with a false promise of stock options which are a tiny fraction of outstanding stock. But this is one of the worst I've heard.

I'm sure the other comments from the smart folks who hang out on HN will echo the above. So I'm going to suggest a strategy for you that is as exploitative as your boss is being:

1. Don't tell him you're leaving.

2. Don't tell anyone you work with you're leaving. I know you feel lonely, need moral support, safety in numbers and all that. But DON"T. You need to take care of your family so it's time to put on your game face.

3. Start networking with other developers in your city or the city you want to end up working in. Also, meet with recruiters, employers, even investors in the kinds of businesses where you want to work. But the most important group for you to network with is your peers i.e. other web developers. They are your best route to your next job.

4. DO NOT tell anyone about your sad story. It may make you feel better, but people tend to shy away from any sign of weakness. It will not help you and it will hurt your chances of getting another job. Come up with a generic story and never go off message.

5. Don't EVER disclose what your current (soon to be former) salary is. It will cause your next employer to "level you" and also under-pay you. Again, come up with a generic (but true) story and never go off message.

6. Keep interviewing, go to second or third interviews and actually LAND A JOB before you even mention a hint of what you're doing. No matter how close you are to signing with your next employer, don't get over confident or smug and disclose what you're doing until the deal is done.

7. Once you actually have another job, give your boss notice both in writing and from a personal email account that you will continue to have access to once you leave your company. Be brief and to the point. Don't get emotional. Use as few words as possible.

Now, about that generic story about your current/former position. It needs to project a positive "employable" image that looks strong and makes people want to hire you. Something like "I've had a huge amount of fun in my current job, but I feel I've outgrown the company. I enjoy working with my colleagues and the work is challenging and fun but I'm ready for my next big challenge." Practice the message on a few people you're talking to and let it evolve until it rolls naturally off the tongue and is giving you the body language you want to see from the people you're talking to.

Employers or recruiters will ask you directly about your current salary. Simply say "Unfortunately I can't disclose that information." They're sales guys and they will push but politely stonewall. It will only hurt you badly by disclosing it. You either won't get the job because they'll smell the stench of death, or you'll get an awful deal.

The one hole in this plan is the reference you may need at your next position. They may want to call up your current employer and ask for one. You could just be honest at this point and say that he doesn't know you're leaving yet so you don't want them to contact him until you've given notice. This actually makes you look stronger because you have a current job. You're not unemployed and looking.

As a general bit of guidance in negotiating:

"Never pass up an opportunity to say nothing." ~Robert Heinlein

"Never let anyone outside the family know what you're thinking." ~The Godfather

It's time for you to take care of the most important people in your life: Your family. So put on your war face and go for it! Good luck!!

http://www.youtube.com/watch?v=O6vHOR8lzTg