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Questions to Ask Before Joining a Startup

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Re: Questions to Ask Before Joining a Startup

#141

Post by retiredcoder »

_bfhp wrote: post #36
i_am_nomad wrote: post #18

Earlier quoted context omitted.

Liquidation preferences mean that some shares have rights that others don't. In a liquidity event (IPO or acquisition), the people holding the "preferred" shares get paid out first, according to the number of shares and the valuation of those shares. If all the cash and other assets from the acquisition are given out to them, then anyone else holding the less-preferred shares get nothing. Usually, the founders and VC…

I don't even understand what half the words here mean and the alienation of human beings still comes through. We can offer advanced college calculus in public high schools but we can't teach basic finance. I don't think anyone but a handful of workers at my job understands any of this

Something tells me it is less about basic finance or accounting but more about private contracts between the founder team or whoever has control of the company and private investors.

Most of the employees are not given access to those terms. For example, in my last job in start-up , senior only celebrated each investment rounds but never detailed any of its terms. So, I had no idea whatsoever of the actual reward I should expect and that seems to be the norm from what I hear.

Re: Questions to Ask Before Joining a Startup

#142

Post by texmex20 »

weka wrote: post #50
seibelj wrote: post #42

The only valid reasons for working at a seed-stage / series A startup: You are a founder. They are working with a technology or in an industry that you specifically want to work with and it is very hard to work on it professionally, and doing side projects are infeasible. You need experience and you have no other option to get experience. You are getting a significant title bump that moves your career forwards. Inval…

> You need experience and you have no other option to get experience. This was me and I paid for it. Right now I'm on week 8 of 30 hour weeks. It sucks.

omg 30 hour weeks sounds perfect

Re: Questions to Ask Before Joining a Startup

#143

Post by throwaway4000 »

jiveturkey wrote: post #139
throwaway4000 wrote: post #39

Having worked at several start-ups, I'd say the employment risks are not worth the cost. In most of my cases, when the start-up hasn't raised enough money, you end up with a poor work environment - pissed off/stressed bosses, weird work hours, "do anything" to save the business mentality... Generally layoffs/firings occur pretty abruptly and you're left filing for unemployment without a "thank you". My advice would b…

I think a willingness to take on the risk is assumed by the author. Once you've made that choice, then how do you evaluate one startup vs another. (as an employee)

i think we'll look back a decade from now and realize 90% of the start-ups from 2008 to present were small businesses in disguise with MUCH MUCH smaller markets than forecasted by founders.

i think hopping to a startup and back to a big tech company is fine. i've done it for career advancements, but it was grueling.

Re: Questions to Ask Before Joining a Startup

#144

Post by nostrademons »

woolvalley wrote: post #98
tdumitrescu wrote: post #90

Earlier quoted context omitted.

I joined a series A startup years ago for none of your "valid" reasons and have never regretted it. It was a company that I already knew of and admired their product, and they had enough traction at that point to offer at least several years' worth of runway/stability ie I didn't have to worry about my job disappearing unexpectedly (at least not more so than any other California job). Work-life balance was always tot…

That is nominally a series A startup, but actually a bootstrapped since series A startup. Big difference.

"Bootstrapping" usually refers to funding the company (in the seed stage) without external investment, whether through pre-selling to customers, relying on founders' savings, doing consulting, etc. I think the term you're looking for is "profitable".

Re: Questions to Ask Before Joining a Startup

#145

Post by jakecodes »

Judgmentality wrote: post #129
jakecodes wrote: post #116

Earlier quoted context omitted.

I joined GitLab as #29. My work life balance has never been this good. I've been working here for ~3 years, my benefits have been excellent, I have learned so much. GitLab may be an anomaly and YMMV, but it has been the best company I've ever worked for, period. Nothing has comes close. In the end I love what I do. I don't agree with this post.

> GitLab may be an anomaly and YMMV I think this is the crux of his argument. Of course there are outliers, but 90% of the time (I don't know the actual percentage, but I'd venture it's around there - if we're only talking about money I'd say 99.9%) someone will be happier if they go to a more established company. And people are often disillusioned when their equity becomes worthless, because for years they were told…

Do you have links to any data that shows the statistics on my luck?

Re: Questions to Ask Before Joining a Startup

#146

Post by desireco42 »

ummonk wrote: post #109
seibelj wrote: post #42

The only valid reasons for working at a seed-stage / series A startup: You are a founder. They are working with a technology or in an industry that you specifically want to work with and it is very hard to work on it professionally, and doing side projects are infeasible. You need experience and you have no other option to get experience. You are getting a significant title bump that moves your career forwards. Inval…

>You are getting a significant title bump that moves your career forwards. The title bump rarely moves your career forwards.

You would be surprised. Added responsibility can help you understand things from next level perspective.

Re: Questions to Ask Before Joining a Startup

#147

Post by OliverJones »

This is good stuff.

I want to emphasize one point. A company may offer you options, or restricted stock units, or any sort of equity in the company.

When they do this, they are asking you to invest in the company. They are asking you to buy your shares with your scarcest resource: time.

Do NOT be the slightest bit embarrassed to ask any question you want about the company's capital situation, funding prospects, premoney valuation at the last funding round, amount of "runway" left before they need revenue or another round of funding, names of major shareholders, preferred shares outstanding, etc.

Warren Buffett would ask lots of questions if they asked him to invest; so should you. Mr. Buffett probably would ask better questions, but that's OK. The company should encourage questions from YOU: they're asking YOU to invest.

If they bristle at your questions, it's a red flag. They may say, "look, that's confidential, can't answer specifically," and that's OK. But they shouldn't get annoyed.

And, remember, you can't pay your rent or buy groceries with unvested options. You need cash money for that.

Re: Questions to Ask Before Joining a Startup

#148

Post by pmart123 »

latch wrote: post #72
Waterluvian wrote: post #13

Earlier quoted context omitted.

In the context of a startup, I would expect almost all of those to be disappointing. But maybe that's what you're hoping to see. In my opinion, if you're a start-up and you've got all those boxes checked, you're possibly doing the right things in the wrong order, and that's a red flag for me. What I hope to hear are responses like, "so this is how we're doing CI. It's awful, almost non-existent. But that's because at…

I would expect most to be disappointing too, and it's a good idea to avoid those. Proper logging doesn't take more time, it just takes more discipline / giving a damn. People and companies that say: we don't have time to do it right Almost always mean: we don't know how to do it right Talent, not time, is the enemy of quality. (at some point that stops being true, but most companies (startups or not) are soooo far fr…

Maybe the context of the answer is more valuable than the answer in this case?

i.e. we have 95% coverage on our core IP and CI setup for all of our source code. But, we integrated X for that service to get off the ground quickly, which will be too expensive at scale so we didn’t implement testing around it yet.

Re: Questions to Ask Before Joining a Startup

#149

Post by zerr »

alain94040 wrote: post #26
jpmoyn wrote: post #15

Earlier quoted context omitted.

Can you elaborate on why your payoff is $0 if you have 1% vested common stock in the company?

The answer is hidden in your question: you own common stock. The investors got preferred stock. As the name implies, their stock has privileges. A common one is liquidation preference. They get their money back first, then the common shareholders get whatever is left. For an extreme example, say the VC invested $10M for 10% of the company, and then the company doesn't manage to grow, and gets acquired for the same $1…

Can't you ask for preferred stock instead of common? Isn't it a common case?

Re: Questions to Ask Before Joining a Startup

#150

Post by 8ytecoder »

desireco42 wrote: post #146
ummonk wrote: post #109

Earlier quoted context omitted.

>You are getting a significant title bump that moves your career forwards. The title bump rarely moves your career forwards.

You would be surprised. Added responsibility can help you understand things from next level perspective.

While we are talking anecdata, I can personally vouch that startups do move your career forward. However, one should be willing to take more responsibility and demonstrate leadership.
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