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Questions to Ask Before Joining a Startup

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Re: Questions to Ask Before Joining a Startup

#91

Post by JJMcJ »

ryanmercer wrote: post #2

(I think it's hilarious I'm being downvoted for making a factual observation...) It amazes me how different startup culture, and tech culture in general, is from the rest of the country. ---- Every job I've ever worked at: Relocation expenses? hahahaha Equity? haha we'll wave your brokerage fee to buy as our stock purchase program but if you wanna sell, you'll be paying brokerage fees. Responsibilities? You'll do wha…

> Relocation expenses

A large company with a senior level hire will have amazing relocation benefits.

Friend had one at director level, everything was taken care of.

At worker bee level, you're right, you might get two nights at a motel if you're lucky.

Re: Questions to Ask Before Joining a Startup

#92

Post by ryanmercer »

convolvatron wrote: post #68
jasode wrote: post #8

>It is also important to note that early employees experience more dilution events. An example of a dilution event would be raising another round of funding. This is another reason why joining a company early should offer more equity. I disagree that it's important to note that early employees experience more dilution events. I know you're trying to educate but this type of advice unintentionally misinforms people an…

most companies dont ever reach billion dollar evaluations. say they get sold for a reasonable $100M after 4 years. my 1% stake as a founding engineer should gross me $1M (house money). but since there were 3 rounds I generally end up with car money. I've been through this several times, and ended up with car money or nothing, and I dont think I'm alone. a warning to fresh grads that they may not end up retiring after…

> should gross me $1M (house money).

That's more than my FIRE number haha, real estate in the Bay Area is so silly.

Re: Questions to Ask Before Joining a Startup

#93

Post by iamdave »

ken wrote: post #88
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. I don't know how else to get the kind of experience you get at a startup. A big company will give you depth, but a startup will give you breadth. Also, if you ever plan to be a founder yourself, working at a big company might not give you any useful experience at all.

Also, if you ever plan to be a founder yourself, working at a big company might not give you any useful experience at all.

Alternatively, from experience, while big company might not give you valuable experience it can give you some good people to have in your network. Even if its to ask your former company accountant for advice choosing a billing partner.

Re: Questions to Ask Before Joining a Startup

#94

Post by wayne_skylar »

convolvatron wrote: post #68
jasode wrote: post #8

>It is also important to note that early employees experience more dilution events. An example of a dilution event would be raising another round of funding. This is another reason why joining a company early should offer more equity. I disagree that it's important to note that early employees experience more dilution events. I know you're trying to educate but this type of advice unintentionally misinforms people an…

most companies dont ever reach billion dollar evaluations. say they get sold for a reasonable $100M after 4 years. my 1% stake as a founding engineer should gross me $1M (house money). but since there were 3 rounds I generally end up with car money. I've been through this several times, and ended up with car money or nothing, and I dont think I'm alone. a warning to fresh grads that they may not end up retiring after…

This is a great point. I think that on average you're unlikely to recoup the difference in wages in the event that the company is sold. I worked for a startup for four years and got nothing.

Re: Questions to Ask Before Joining a Startup

#95

Post by arielm »

> How does the company collect feedback from customers?

I’ve read quite a few of these guides and they mostly focus on equity/benefits but I think product/market fit and feedback loops are a treasure trove for job seekers because they can show you the future as well as how focused the founder(s) are.

As a founder I’ve never been asked about feedback loops and rarely get asked about product market fit. We’re not technically a startup anymore, so that could be why. But I think those are useful questions for any company that isn’t a household name like Facebook or Apple.

What you should be looking for in an answer is whether it sounds like the company knows who it’s serving and is actively working to understand that audience even better.

Regardless of valuation, rounds of VC, or the flavor of popsicles you can find in the fridge, fit is what will ultimately get success. In my opinion/experience.

P.S. - understanding everything else is also super important for _you_, but this is important to understand to tell if there’s a future in which those would be worth anything.

Re: Questions to Ask Before Joining a Startup

#96

Post by decebalus1 »

tdumitrescu wrote: post #90
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…

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…

Sounds super great! Congratulations on your anecdotal experience which means absolutely nothing in this context. I just hope a wide-eyed college grad doesn't come across it and influences his/hers decision about joining.

Re: Questions to Ask Before Joining a Startup

#97

Post by fatnoah »

i_am_nomad wrote: post #18
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?

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…

>He forgot to mention preferred shares given to VC’s with liquidation preferences that likely never disclosed to new engineers.

>Usually, the founders and VC have the preferred shares, while someone writing unit tests at 3am does not.

This. I moved into a VP Eng role at a startup and had options for common stock worth about 0.7% of the company. When we were acquired, those were worth zero, though I was decently compensated by the acquiring company with cash and stock. The money I made was due to my role/position rather than my equity.

Re: Questions to Ask Before Joining a Startup

#98

Post by woolvalley »

tdumitrescu wrote: post #90
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…

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.

Re: Questions to Ask Before Joining a Startup

#99

Post by master-litty »

decebalus1 wrote: post #96
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…

Sounds super great! Congratulations on your anecdotal experience which means absolutely nothing in this context. I just hope a wide-eyed college grad doesn't come across it and influences his/hers decision about joining.

Subjective meets subjective. It's the appropriate context. I hope it helps college grads make an informed decision that's right for them.

Re: Questions to Ask Before Joining a Startup

#100

Post by woolvalley »

mikestew wrote: post #73
jiveturkey wrote: post #41

Earlier quoted context omitted.

so are you saying you’ve ever been able to get those numbers? i never have.

I see this advice bandied about, and I have to assume that I've just never hit on one of those companies, or there are somehow two classes of interview candidates. Because I'm 0-3. And, when I think about it, hell no I'm not handing a cap table to some senior dev candidate. Higher up the chain, maybe, but not some NCO[0] with a fancy title. Taken another way, when companies refuse to give you the numbers to properly…

What happens if your cap table is public? I would imagine if your wooing investors, they will get to see the cap table + more even if they never invest. And VCs talk to each other, so they can probably find out if curious from other VCs. Why all the secrecy?
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