Taking a job at a startup?

Also, fwiw I'm currently single (no family to support) and about to finish grad school without any loans.

Go for the startup. Much more fun in my experience than in a big company.

If it goes bad down the road you can easily quit and find another job.

drivel wrote:

I have worked at several startups.

What to expect:

* The company will likely not be successful,

* You likely will not make as much money as at the large company,

* Frequently there will be total chaos,

* Office politics will likely be as bad or worse than at a large company,

* It is likely to be a fun company to work for initially,

* When the company grows a new layer(s) of management will be inserted between you and the president. Your new manager will likely decide that he does not like half the people that work for him and will try and get rid of these employees.

Thanks, I'm pretty aware of most of these.

I'm wondering in particular if you (or anyone else with experience) can give me tips as to what I should be negotiating for with the startup - how much equity, how/if my salary should change as a function of additional fundraising, etc

Add this:

They will constantly ask you to work weekends and unpaid overtime.

They will constantly dangle the prospect of equity in front of you.

Unless you "win the lotto", you will be worse for the experience and totally burnt out.

The only reason you should consider a startup is in the following condition:

A) You are the founder.

Make sure you get a boatload of stock. 1-3% of outstanding shares with emphasis on 2-3%.

I also got an agreement that I can work whenever and wherever I want.

It doesn't work. Your boss will want the face time. It's inevitable.

Plus if you get stuck on a problem, they won't realize how long it takes and you'll be working more than if you just went in to the office during regular office hours.

Make sure they can't dilute your shares...

did it for a EV start up. 7 days/week for 3 years. I was doing the work of 5-6 people in "Big 3" automotive company.

I will re-iterate what many others have stated.

It doesn't matter that you have an agreement to work when and where you want. You will be working tons of hours or be invited to leave.

The glory days of making it big with stock options, a la Microsoft are over.

The only ones in a startup that rake in enough to make the long hours worthwhile are the CEO, CFO, CTO, and general counsel.

You might get a good retention bonus when the company is bought out, but again be prepared a bunch to earn that retention.

Good luck.

I work for a company that was very young when I started there (just a couple years old). I've been there 7 years to date and don't plan to leave any time soon. It's the best job I've ever had.

The biggest consideration is the ability of the person(s) running the company.

After researching the individual be sure you have everything about your business relations in writing. Earnings, what share you have in the company, what your options are, etc. There needs to be agreements on such matters in writing or else you'll end up becoming a smelly bum, out of money and out of luck. Probably end up sleeping in a van down by the river.

Go the corporate route.

It depends on what you are looking for.

I have worked for 2 startups. Currently I work for a large semi-conductor designer/manufacturer, which acquired one of the startups. I received a nice retention bonus to stay on with the new company.

At the last startup, I reported to the CFO or CEO. There was a lot less red tape back then - if we needed something, I "sold" my idea directly to the guy who was signing the checks. Now, if I need something, there are policies, procedures and approvals. The startups were fun, and I was able to see the big picture. At my current company, I am surrounded by people who have no idea about any picture, much less the "big picture" - they simply process what is in their "In box" without much thought being given to where it came from, or where it is going after they have done their part. The nice thing about working for bigger companies, is that you know that the next paycheck will likely clear the bank.

*A good question to ask at the startup is how do we make money? Tell me about the business model. How long until we are profitable? Who is going to buy our widget or our widget service? What are the plans for "Widget V.2?

I interviewed at a startup and it felt kinda like a cult. The CEO had me go take a walk with several of the members and talk with them. Felt awkward.

drivel has a lot of good points. I'll add a few from my own experience.

Realistically, probably better to hold the line at a no salary difference (or very small) and make sure that the benefits (401k, healthcare) are at least available, though they will certainly not match a bigger company. So benefits are your "give".

I agree about the 2-3% of outstanding shares idea, however your chances of getting stock that cannot be diluted are zero. Dilution will happen to the point that an initial 3% will be .003% by the time the stock has any value. It is the nature of vulture capital.

You will work a lot more hours. However, your contribution will be much more substantial to the product/value of the company. You will get your hands in a lot of varied work and learn in one year what would take you 3-5 years to learn in a big company where you will likely be pigeon holed.

You will likely never be directly compensated for those extra hours, but again you will have much more experience. Therefore you will get more job offers in the future and your next job will pay more. That experience will help you choose better situations for yourself in the future.

If you go for the big company, be prepared for mind numbing meetings, procedures that stifle any actual work getting done, and being the guy who does just one little thing in a very large machine with little impact or visibility into the rest of the machine. You will have a decent salary and benefits, but no more job stability since the company will do mass layoffs every time they lose a contract. You could eventually move up to middle manager. This is the person that upper management puts in between them and workers. Their primary purpose is to listen to worker complaints and have absolutely no power to do anything about them. And they get fired if they escalate those complaints to upper management.

My experience is very positive with small companies and start ups. Large personal contribution and personal satisfaction. Stock options paid off once, but in a very small way (calculation of hours above 40 for 3 years, I made about $4/hr, about enough to buy an economy car). Now I make a lot more due to experience and can hit the ground running anywhere on any type of project, therefore make more money. Not so bad. Mostly, I still work at small companies.

Bottom line, if it sounds interesting and you are willing to take bad with the good, do it.

So I'm a young buck like your self, I worked for a "start up". It was a small R&D shop with 5 employees plus owner (who had full time job at a national lab) doing primarily SBIR grant work. It was a great experience. I was a little bit underpaid but loved the environment and I learned a ton and was able to gain experience in everything from patents, experiments, modelling, production, grant writing, and a little bit of marketing. It gave me a ton of perspective on what business is (as opposed to just engineering). Additionally being part of a company that had to go fight for money was to me worthwhile. I have not worked in a large industry job so I can't make too much of a comparison.

bump, any other letsrun entrepreneurial types?

I've worked for 6 or 7 startups. Two paid off. One went public and one was sold to a larger company.

Like others have said, make sure you get plenty of equity. Get the initial percent of outstanding shares in writing and do something about future dilution. You might need to get creative here, but that's what negotiations are for.

There is no hard and fast rule about the percent of shares you should ask for. You have to know how big the market is, how much your company could potentially make, how much much venture capitol will be required in the future, and how much dilution is likely to happen before you can cash in.

But here is the real test. You have to ask yourself, "If I had a million dollars would I invest it in this company?"

If the answer is no, let it go.

If the answer is yes, you are in for a really exciting ride.