How to Choose a Startup to Work for by Thinking Like an Investor

An aside to this article: along with thinking like an investor, you can also reach out to investors who will often be willing to help with your job search.

For example, as a seed VC there are now about 80 companies at various stages that my fund works with. If someone emails me and says, "I'm a good engineer who wants to join a Series A startup in SF or Oakland that has characteristics X, Y, and Z," there's a good chance I can make a few useful recs.

There's nice incentive alignment here: the VC doesn't get any compensation, they just want their companies and the prospective employee to do well. That means 1) we won't recommend a bad fit to an employee because we want the employee to join and be happy and get their friends to ask us for company recs; 2) we won't recommend a bad fit to a company because we want founders to like us and not feel distracted by us. We're going for quality, not quantity -- and you're welcome to ignore our suggestions. So if you're good at what you do and are looking to join a startup, consider soliciting recs from a few investors with large portfolios.

I wrote a short post about this a few years ago: https://www.codingvc.com/using-investors-to-find-the-ideal-s...

I might regret posting this invite on HN, but if you want to join a startup and want recs, my email is in my blog's header.

The metaphor of early startup employee as investor seems really smart at first but is ludicrous in reality.

It is physically impossible to choose a startup like a VC because you cannot diversify your portfolio like they can. VCs can sprinkle (relatively) small amounts of money across dozens or hundreds of startups. If one fails then the impact to the portfolio is negligible. In fact, VCs expect that most of their portfolio probably won't pan out.

Good luck diversifying as an employee. Working part time at even 2 startups is obviously laughable.

If you're in it for the money, working at a startup is probably not for you. It really is akin to gambling. There may seem to be more information available than gambling, but there is so much unknown and hidden information it's damn near impossible to make a 'rational' decision.

That's not to say you should never work at a startup. Startups are often great learning opportunities because you usually have both broad and deep scope of responsibility. There's also often better alignment between management and employees because people tend to be working stuff that is materially relatable to the bottom line. It can also be a career accelerator if the company grows headcount rapidly and you suddenly become a 'senior person'™. YMMV.

If you can, you probably should! I've come to believe that the best chances of getting a financial benefit (as opposed to just an experience benefit) from working at a startup is to be a founder. If you're "just" an engineer, it's unlikely to be worth it.

The best part is stock options. Not only are you not diversified, now you get to concentrate your portfolio by buying stock in the company that provides your income.

Stock options: for concentrating your income and your investments when you're excited and biased.

Even if you are not in it for the money, joining a big company gives you good income right away. Speaking from experience, the quality of life change when you don't have to worry about daily expenses is enormous. Being able to buy high quality groceries, eating out when you want to, spending time/money on hobbies, etc. can improve quality of life significantly. Besides these selfish reasons, it's also possible to donate a much higher percentage of your income for good causes.

Between my wife and I (both software engineers), we have played this VC startup game 5 times. Never again.