Being quite senior now, I'd feel comfortable asking:
1 - To see their CI dashboard
2 - To see a sample of their production systems stdout & stderr
3 - Asking to review a recent non-trivial commit (with the person/people who wrote it)
4 - If you're interviewing remotely for an on-site position, finding out if they have an open office
5 - Finding out how they do deploys / devops
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 our scale it just wasn't important. But as we grow it will become VERY important, so here's what we're thinking about doing in the next 6-12 months..."
I've experienced a start-up with lots of tooling and process , none of which matters when you take forever to ship (and stay shipped).
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
we don't know how to do it right
If we are talking about a really young/small startup and you're a senior person, then you need to have a discussion about it with whoever you answer to.
If we're talking about a really young/small startup and you're a jr person, you'll just learn a bunch of shitty habits.
If we're talking about an older/larger startup, then you have a problem.
In my opinion, that depends on the experience/background of your staff. I have even seen open source projects (not backed by companies) get all the boxes checked in a very short period of time. For a project maintainer who has prior experience, it just takes several hours at most to set up a git hosting server and the CI/CD infrastructure. The time saved for fixing a single regressing can easily pay off the investment.
As I always say, "If you are building a startup, over-engineering is a far bigger sin than creating technical debt."
Thing is, it can go to the moon or it can flame out but there is this giant middle part of the spectrum where there are good exits and those exits often involve supporting your product and having well documented and tested technology is a positive. Trust me on this, it really sucks to get bought and then explain that it’s going to be a year and a rewrite to do the 10 things the buyer wanted yesterday.
Using Clubhouse to manage mine and the other dev's work now and it all seamlessly links up.
Took at most 30 mins to a few hours to setup each integration. Only downside is the monthly cost of all of the above but in all honesty if even a small startup doesn't have most of the above I'd consider that worrying.
I would worry a lot more about the business itself. Does it make sense? Do you see a credible path to paying customers? And the most important of all: are the founders the right people to grow and lead this thing? Could be experience or passion (ideally they should score high on both).
I ask questions more along the lines of what is wrong, and how are they correcting it. Good answers there can show a good long-term result. Bad answers there... run away.
One of the startups I worked with didn't have "good" practices just like what is listed above, and it took a while to get there. The thing is, we're still pulling quite healthy numbers, and we have paying customers. What made it bearable was our engineers knew what needed to be done, and had the technical chops to get there. You'll probably want to avoid very elitist engineering cultures that aren't open to what's considered good practices.
Many successful startups run on the shadiest software architecture in the early days, but market pulled product out of the startup. Today, they have the engineering resources to make it a lot better.
But I do get where you're coming from. In my experience, it's better to ask about the team and its CTO to understand how decisions get made, and if the team is capable of recognizing quality. I don't care if CI isn't in place when I join as long as the team recognizes its importance and knows they need to get to it.
They might not even be able to hire a Senior Engineer in most cases. Maybe you wouldn't even want to talk to an early stage startup at your current seniority level.
Having said that for anybody who really wants to join an early stage startup the only thing that should probably matter is what is it that you're trying to do and how can I help you reach your goal? Will you be able to pay me enough on time and for how long?
- If you get the money and opportunity to hire really senior/well known dev to lead your eng. team, would yo do it
- Ummm no, we believe in our team, and their strong knowledge, there is no problem they cannot solve (or something along those lines)
Run.
To me, the red flags are absolutes. i.e. "Yes, we would absolutely replace our team lead because we only want the best" sounds like a toxic place, and it's not the kind of place I would expect to find (most of) the best engineers that I've worked with. And "No, we would never hire that person because our team is the best" sounds arrogant or naive.
https://www.joelonsoftware.com/2000/08/09/the-joel-test-12-s...
PS: Yes! Shockingly not all startups use source control.
That's a good one, definitely gonna ask this at the final interview stage of my next job. It very much indicates how people work, whether they spend a lot of time fitting in features into a difficult code base or if things are just working a features a developed at a predictable pace. (On prod won't stop working on weekends)
Another idea would be to see their event and analytics dashboard for their infrastructure KPIs.
If they don't have one it's a bit of a red flag.
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 and causes people to pay attention to the wrong thing. Ultimately, the more important math is number_of_shares multiplied by share_price. As long as that goes up, dilution is not as important. What employees will care about is whether the total money wealth went up and not whether their 5% ownership turned into 4% because a new investment round bought 20% of the company. I have no idea why dilution attracts so much verbiage that's out of proportion to its mathematical importance.
E.g. "Oh, company X got acquired for $250 million. We do something similar. If I own .025% of the company, I'd make $62,500 if we exited at that valuation. Cool."
It's important to be aware of dilution events so that you realize when you accept the offer that your .025% will be more like .008% if you're lucky enough to have a successful exit.
But you're repeating the same error of prioritizing the wrong thing: dilution.
What employees ultimately care about is their wealth calculation: shares_multiplied_by_price.
Example of the type of math people actually care about:
0.008% (because dilutions) a $1 billion company is $80k
0.025% (no dilution) of a $100 million company is $25k.
For most employees that are minority shareholders, dilution is a side-effect calculation in the realm of academic trivia. Dilution is not a purposeful strategy in this situation. Highlighting "dilution" in advice for employees in an attempt to make them more financially more sophisticated has the opposite effect!
The scenarios for dilution to be a calculated strategy would be something like a founder considering 2 different offers from potential investors. One VC offers $20 million for 15% of the company. Another offers $30 million for 25% of the company. Or some founders selling too much of a percentage such that the dilution crosses some boundary such as 51% ownership where they collectively lose control of the company. These deliberate decisions around dilution are very different from employees realistically worrying about dilution dropping them from 0.025% to 0.008%!
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 spending years of putting in time and a half seems in order.
If the value of your stake goes down, you shouldn't just blame dilution. You should blame the company for performing poorly.
That's more than my FIRE number haha, real estate in the Bay Area is so silly.
As for its overall importance, most companies simply aren't going to be homeruns. I was at one company that passed on an acquisition offer of $X and opted to take an additional round of funding. A year later, the company sold for the same $X that it passed on. For sure, it was hoping to go much bigger than it ultimately did. But in addition to having to wait for all liquidation preferences to be settled, the employees all got to experience additional dilution for no additional gain.
It's great to shoot for the stars and everyone joining a startup hope that's the outcome. But I don't think it's out of place to also think about the median case. An early stage employee takes a lot of risk with few protections.
The real reason employees should put up with dilution is because the share price doesn't always grow. Sometimes, the company runs out of steam and it drops to zero. They should put up with dilution because it gives the company a better chance to end up profitable and for their shares to be worth anything at a liquidity event.
Emotions.
It's the same reason why many SMB owners get caught up in the 50/50 vs 49/51 split (when there are other, better ways of resolving the voting right aspect) or squabbling over a couple of percent in an investment deal.
Logically, the differences are trivial, are likely to be diluted out anyways, and ultimately matter little compared to other factors.
Emotionally, it feels huge. It "feels" like you're giving something up. On a pizza, "50%" is better than "10%" because it's clearly more of the pizza. Same with many tangible things in life.
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.
You can't pay your rent or buy groceries with vested options either.
Then again the UK is saner when it comes to employee shares - and I am lucky that I have EMI options - which are taxed at 10% CGT and 0 income tax.
At my last company they had no equity going in, and added it on Jan 1st a year later. When I spoke to the founders about raises for the engineering team, the CTO looked at me funny.
"we just gave everyone stock options, why do they need a raise?"
Why?
Because a few of the engineers had young kids that were just starting school, and equity on a 1 year cliff won't pay those fees.
Because in Sydney there are enough start-ups that any one of the engineers could get an offer for 10-50% more base salary with options on top.
The founders were genuinely great guys, but they couldn't see the wood for the trees.
You own 1% of options and company is bought for $10m.
Your payoff?
Likely $0.
He forgot to mention preferred shares given to VC’s with liquidation preferences that likely never disclosed to new engineers.
This is what makes new engineer to sacrifice his salary for a possible liquidation even that likely either never happens or there is no money left for him after VCs took their xN ratios off the payoff.
https://angel.co/blog/liquidation-preference-your-equity-cou...
"How much would the company need to sell for before my equity has value?"
Key #2 (not mentioned ANYWHERE): "Can you guarantee that my equity will always be worth at least that in case of acquisition for the above value?"
Key #2 stated in writing (congruent with typical verbal promises of implied future wealth) will actually protect you and possibly justify your salary sacrifices.
Without Key #2 guarantees - the next round of funding will likely push your equity value out of existence.
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 $10M amount. The initial VC gets the $10M back from the acquisition (they make their money back, no profit). Then there is $0 left, and the common shareholders (early employees and often founders) get nothing.
It's a contrived example, and there are many other complexities to such a deal, but you get the idea.
Usually, the founders and VC have the preferred shares, while someone writing unit tests at 3am does not.
This is why a lot of folks from Good Technology got screwed. Valued at 1.1 billion .. sold for 425 million. Preference stack was skewed to investors + mgmt.
This means that on an acquisition the original investor gets a minimum of 2x their original investment. In the case the start up is acquired for anything less than $10 million the original investor gets everything.
When joining the company, you might be granted a set of options which are described as comparable to 1% of total shares, but the number is almost always effectively lower than that.
If the company does well, future funding rounds will lead to dilution of your ownership.
If the company does poorly, VC's will have liquidation preferences meaning that they get paid back first. This can easily bring your ownership down to 0%.
If you can't get those, then unless the equity is just butter to you, walk .. as you don't really know what the comp looks like.
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.
Invalid reasons for working at a startup:
Equity (getting rich off stock options) - this is very likely to be worthless unless you are a co-founder.
Salary - you would make (much) more at a big company.
Work life balance - you will work harder than you ever have.
Stability - does not exist.
Benefits - very bad.
Learning - they will not have any formal training nor time to train you, so be prepared to self-learn.
---
All that said, I enjoyed my time as an employee at multiple startups. Just go in for the right reasons and your eyes wide open.
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 that would be worth millions and they accepted low salaries because of it.
Of course sometimes it does work out great, and I'm happy that it did for you! But statistically, you are incredibly lucky.
What's the amount of your salary? What's the value of your equity compensation? How much time do you get off?
(your benefits may not be as good as you think)
valid: you want a sense of ownership and responsibility. if you don’t perform, there is a noticeable effect on the company.
valid: you want to be in an environment where others are just as committed as you to the success of the company. you want to treat your work as an endeavor, not as a means to a paycheck.
Are there big investors? Welcome to big company politics.
> valid: you want a sense of ownership and responsibility. if you don’t perform, there is a noticeable effect on the company.
Responsibility? Sure. Ownership? Unless you're a founder or a big investor, haha, no. Unless you mean the corpo-speak "ownership," which is just another word for responsibility.
Responsibility might make the work more emotionally rewarding, but it also makes the work more stressful, so I won't sell it for free.
> valid: you want to be in an environment where others are just as committed as you to the success of the company.
They may measure the "success" in terms wildly different from you, the employee, though.
> you want to treat your work as an endeavor, not as a means to a paycheck.
Actually while I might want something more, endeavour doesn't pay rent.
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.
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.
To add to this. The title of "early member of <insert famous startup company>" holds a lot of weight in SV circles. Whether or not you legitimately helped those companies in the early days, it's a strong signal that you are valuable. And those <insert famous startup company> doesn't have to be a company that necessarily had a huge exit or has a strong economic reputation. For example - early engineer of Yahoo? Ya, people probably think you're worth one's salt.
IMHO - I think this is the main driver people join startups. It's taboo, but vanity feels much more tangible than equity.
Benefits - very bad.
Both of these are valid reasons to work at a startup, if you have a family to feed and care for.
Sometimes any job is a good job, even if it's only temporary while you try to find the perfect gig.
Edit to add:
I've been in exactly this position. I took a dev job with a startup I knew was a complete loser, run by scam artists. But I had to put food on the table. Fortunately, I was only there about eight months before I landed a real job with a real company.
The dodgy company imploded, exactly as I expected it to.
You see guys working late at their little startup and maybe thing you should tell them it’s not going to happen. Because honestly for most of them it’s not.
But... I want to make the case that it's OK.
Even if it’s never happening they may be happy. If one stops viewing startups as $$$ opportunities and starts viewing them as rehab from the soulless corporate jobs full of soul-wilting mediocrity, politics, legacy, same old shit over and over, and backstabbing, then it might make a kind of sense to work at a startup instead. Take a pay cut and "try some different shit out" with a tightly-knit team.
It’s a chance to work with things that are greenfield and/or new/different/experiment. Maybe it works. It’s a chance to not be bored. You aren’t wedded to it and don’t need to do it forever. Stay up late and code for awhile. Have pizza. Debug. Try. Care.
The gotcha is if people focus on the IMGONNARICH including the management (where it translates to UNDERMARKETYOURCOMP, though maybe one doesn’t care). That’s poisonous but I think there are lots of options where this isn’t true.
The more people I talk to outside the Bay Area, the more I encounter who I think are doing it right. A lot of them are not crazy, they don’t really think IMGONNARICH. They don’t end up in the FEELINGSWILLBECRUSHED state after it doesn't work (because, honestly, it doesn't).
I like people and being around them. I love the feeling of a team pulling together and exploring the dark corners of a problem. So when a break is in order, the answer might be startup rehab. It's cheaper and better for your career than a full-on year off.
The title bump rarely moves your career forwards.
These questions have always guided me well.
1. I never graduated from university (life came up, and I couldn't afford to keep going); but, also,
2. I don't live in the US (I'm Canadian.)
Any of the US bigcorps that want to hire programmers, expect them to get a visa and move to the US.
You know what you need, to get a work visa as a programmer coming to the US?
A college degree!
So, my employer pool was instantly limited to non-US companies. Mostly local Canadian companies. Most of those are very conservative and also expect a college degree. The only ones that aren't, are startups. So that's what I had to do.
The really annoying thing is, I ended up doing work for these Canadian startups that would netted me a $300k USD salary if I had been doing it for a US bigcorp. But, because Canadian salaries are lower, and startup salaries are lower, I was only getting ~$60k.
After years of doing that, I'm a Canadian startup founder... and still only making (i.e. paying myself) $60k.
I guess I'm an object lesson in the value of a college degree!
As well as the really innefective way we judge talent in the US
Disagree with this one - yes you will need to self-learn, but learning to self-learn is an invaluable tool in itself. You will learn to be extremely non-reliant on other people, and you will probably need to learn about parts of the stack you did not know about before, and fast. You might learn about project management or giving sales pitches. If you are thinking about starting your own company, you will learn a huge amount about how this happens, and what that means (I learned that I didn't want to do it for example!)
I have learned a huge deal from my startup experience, probably double the rate I was learning at the bigger company I was working at before.
Because I would add "chaos" to the list of negatives. The odds are likely you're going to get a C-suite or board that has ADHD-like tendencies, especially when chasing large customers and/or funding rounds.
You will continually be dropping or delaying long-term work for short-term projects to help the company achieve other goals.
At that point, it's just another job. Unless the company is clearly headed for a unicorn IPO, your tiny slice of the company is unlikely to be worth much.
This was me and I paid for it. Right now I'm on week 8 of 30 hour weeks. It sucks.
Sounds terrible
There are tons of resources online for questions to ask, and I think the company/viability questions from the post are good, but I would add to them some of these types of questions:
How you will be managed/evaluated and the mission of the company: https://www.themuse.com/advice/8-questions-most-people-dont-...
How your founder/manager will navigate conflict, which is inevitable: https://www.thebalancecareers.com/interview-questions-to-ass...
More specifically: Is there a demand for the product? Are there competitors? If not, why not -- are you sure the product is actually something that somebody wants? If there are competitors -- how will your startup compete with them? Do you trust the people running the company to guide it to success, either directly, or because they have plans to hire people who can? Is the technology feasible, or are the founders embarking on an R&D project?
There are no guarantees of course, and you can learn a lot and have fun at a startup that fails, but do your best to join with your eyes wide open.
Asking about competitors is a great question though.
The few success stories, such as Airbnb and Facebook, are the extreme exception.
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.
Ask yourself-
Do I trust the founders?
Can I have healthy debate with the founders?
Will my feedback be considered by the founders?
Am I compatible with the founders?
Are the founders compatible with each other and are they able to work together constructively?
> Do I trust the founders?
At first, I did because I was too green about small businesses. I thought the worst they could do was pay me lower wages. Oh, boy, was I wrong. Not only did I get 1099'd, but also had my hours and wages cut two months in. (The 1099 was resolved, though, thanks to the IRS's contest process.)
> Can I have healthy debate with the founders?
I found out after joining that the founders were married. So no to this one.
> Will my feedback be considered by the founders?
It was, but then promptly discarded since the founders lied about their technical skills (they knew enough to sell tech but not to build it). So everything was a game of "why can't you just drag/drop this X thing like we can in Photoshop".
> Am I compatible with the founders?
One of the founders sold me on the fact that he played guitar. But then I found out that they blasted the office with very light AM classical music for the whole day. So nope, not compatible.
> Are the founders compatible with each other?
They were married, so no.
> Are they able to work together constructively?
See the above comment.
------
Anyways, my experience is only anecdotal. But yeah, really dive into the founder's dynamics to see if you can tolerate them or not before accepting a job.
I will say this much. People have bad memories. That includes you. You think you remember that conversation perfectly? You probably don't.
Get. It. In. Writing. And don't trust anyone who won't commit to writing.
Or just go work for a more established company where you don't have to deal with this stuff. Because, frankly, you're not ready for a startup if you don't have the mental intuition to ask for everything in writing.
1) A startup with marginal success and showing growing signs can simply ignore you and your questions and move to the next candidate. Startups where all these ducks are in a row has a strong candidate pipeline and they simply move on. You run the risk of standing out not as a diligent person, but as someone who is meddling in issues beyond his/her means.
2) A startup willing to divulge all this and walk the extra distance for you is probably too raw and desperately short of talent. When you get hold of all of this information, you might feel this startup is not worth it, given you now know where the skeletons are buried.
In the end, you really kind of have to wing it. Just like the VCs, the founders and everyone else is at an early stage of an endeavor. It is a high risk game, period.
My 2c is often towards ignoring all this math and doing your best to learn more about the founders, their motivation and if they will take care of you. Good founders always find a way to compensate you for your hard work whether by financial means or by paying it forward in other ways.
One of my friends works in a startup in Berlin where he was offered equity as one of the founders (10th engender or sth like that). Chances that he will be able to liquidate them in foreseeable future is non existing.
Nobody else that I know was offered an equity, even though quite a lot of my friends work for well funded startups. I worked in some and nobody offered me anything else but a salary.
If I relocated near SF? Sure, there would be a possibility. If I was a rockstar and one of first 5 cofounders? Also yes, but I am not famous.
I am really skeptical about any such post, as I saw myself that some strategies that works in Silicon Valley do not work anywhere else and I am not into moving to the most spoiled IT region in the world.
I've never been an employee of a German company, but I'm in the process of founding a startup here in Berlin. I totally get how saving early employees from having to deal with that headache would be a blessing.
(In general, the advice in the article tracks with my experience working not just with SF-based startups but companies in other top-tier tech cities like London and NYC. If you get a job at a startup in SF, you'll absolutely get equity as meaningful part of your job offer, even if you actively don't want it. A large part of startups' ability to hire depends on them being able to convince you it's okay you're being paid literally less than half of what Facebook pays because someday your 0.01-0.1% equity stake might be worth something)
Nope. In the US, you may be taxed when you exercise, and will be taxed again (against the new basis) when you sell. Whether or not you are taxed at exercise is a very complicated matter.
Keep in mind, when you are granted stock options, you don't actually have any equity. You have an /option/ to acquire equity. The taxable events are the acquisition of that equity and the subsequent liquidation of it.
They paid their employers quite well, really good rates. All of programmers (besides 2 founders I believe) are contractors - no equity. They negotiated their hourly rates pretty high, because they knew that even if it will be a great success, they won't get anything else than a salary.
And I would not call it spoiled its just that in the US "engineers" (using the term widely) have managed to get a fairer share of the pie.
Some of the specific questions are not great depending on cultural context. For example if someone joining my dev team asked me to pay to ship their car somewhere I'd ask them why they needed a car to code. But I'm in London, where having a car has marginal/negative utility versus being essential in other places.
On the equity side, if someone asked these questions I'd know they don't understand equity. What would really help is to see the cap table so you get liquidation preferences etc but you're not going to get to see the cap table most places if you're just going for a dev job. As it is, he says you might not get told the strike price on your options, which in many/most countries your employer would be legally obliged to tell you as it's part of the valuation of your comp for tax purposes.
Equity in a startup is often used as a way to entice people to work without having to pay them market rates. If you suspect this is the case, definitely keep in mind that this equity could very well never be worth more than $0.
If you are interested in the value of the equity, then you have to be interested in the value of the business. You must understand whether you think the business value can grow. And this requires much more research and business strategy evaluation than most jobs offers.
It's worse than when negotiating with a bigger company actually, cause there you're just negotiating with HR department employees who would follow the law more closely. At a large corp, you largely get what you expect.
Be very wary of what you're promised and told. I, unfortunately, was burnt by this. I largely trusted everything that I was promised/told about the company performance. But it was all hoax.
So an additional tip: Cross-check with your friends how they feel about the company. Make this effort even if you are a bit introverted and don't like discussing job offers etc with other people. Match what your research about the startup tells you with what the founders told you about the company performance. Look out for red flags.
This is very important. I have a friend who took a job at a Mysterious Fintech Startup - he told our social circle in the pub and the entire table collectively groaned and encouraged him to find something more stable (red flags involved being paid pre-tax, etc).
They went bust a month later, a day after he decided jumped ship.
On the fundraising side, I’d add, “What is your fundraising steategy” when talking to the founders. This massively changes potential value calculations in terms of equity. I know some founders who are focused on not raising funds and pure profitability, others who are focused on growth by any means. Part of the calculus here is that by not shooting for more fundraising rounds, the founders may be signaling that they won’t be selling anytime soon. In that case, you should look to understand what your exercise rights are for your options. Do you have to exercise within 90 days, or is there a grace period?
But I don't see a growth opportunity in a big company, the work is boring as hell and there are engineers, who joined 5 years earlier than I did, are still on same level as mine.
And the key engineering work is hold tightly by early members, unless they retire, I don't see a chance.
And I want to do robotics. Although my current company is investing in the area, they only need people with the right background, i.e. PhDs in robotics. And I have talk with google recruiters, they let me choose a position before the interview, but all my selections are as boring as my current position.
Doing a startup seems to be only way?
My most important preliminary questions are all trying to get to root of one issue: Does this company follow a theory x vs theory y leadership model. So many companies out there claiming to be team oriented but in actuality are top down, my way or the highway operations.
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.
This is an interesting, and perhaps telling, assertion. 40% can be done if you minimize costs, not only in the Bay Area, but anywhere else. Thus, the implicit point here is apparently that the opportunity set in the Bay Area is so great that it's justifiable to allocate an additional 15% of pretax income just to live there, relative to anywhere else on the planet.
I'm not sure if I buy that, especially within the context of taking a job that you've already been offered that has a defined comp package vs. moving somewhere to find a new job.
There is no clear answer for the correct time other than to not assume it's simply ok to state everything upfront (vs. time wasted on the part of the applicant).
90% of startups fail.
If you have two options, one being getting payed your preferred rate, and another being taking a huge pay cut for equity.. experience tells me to take the money every time and you’ll have made the right choice 90% of the time.
For most people money on hand today is way more important than future money that may never even materialize. And if you’re not most people, there will be future opportunities to buy into the company one way or another if you want to be an investor. You don’t even need to invest in the company you work for, there might be better investments that your real money that you get from the job can afford.
I've also asked about early exercise (83(b)) and term sheets, if there are bad terms i.e. liquidation pref, anti-dilution etc but not all companies are willing to share this info.
Also, I am curious about why companies don't just have a black box formula output generator, with your equity offer value, saying this is our projection and based on our current termsheet if the company exits at this value your options are worth X, with the option of dilution built in.
Actually, I'd argue 23 has a way better ring to it: https://en.wikipedia.org/wiki/23_enigma
Additionally, it would be great if there was material like this that was much more approachable by someone early on in their career.
Whether it’s worth it “to get rich”, is kind of a bs argument. If the opportunity exists to be a founder go for it, if not take the next best possible option.
Your decision point around the cost of those options seems poorly thought out, besides being a victim of a false dichotomy.
And tax wise it can work out better as you don't pay income tax of the shares sold to buy the others - this is scenario dependant.
It's bad form (imo) to ask about benefits, salary, equity, etc during an interview, and hold those questions as a candidate is evaluating an offer.
My general view is if you're in the first 10 or so employees for a VC-backed startup, you deserve near-founder benefits (including financial transparency).
It asks "How does the company collect feedback from customers?", which sounds like a pretty generic question, but there's nothing at all about working conditions, which I'd consider a top priority at any job.
This is a vast oversimplification. The entire section on equity is very, very deficient and should just be disregarded.
This article is a fine start, but it still needs lots of work.
I've joined a few different startups all series B or later, and have asked at least 2 of them how many total shares there were. Neither would tell me.
one late round "startup" i worked for, 300-ish employees and series F (just before I started), but still very much a startup, actually gave very, very detailed info in the option/RSU packet as part of my offer, without me having to ask for it. It included per-round valuation and dilution info, shares outstanding, other good stuff. Not liquidation prefs though. I've never seen an offer packet like that before or since.
I'd just value the equity of any company that won't share this information at zero.
- do employees work overtime because they have to or because they want to? - what do you do to keep your employees happy? - whats the turnover rate?
"We are a private company and don't share this information."
Outside of the room, the Engineering team laughs at your questions, Operations and the CEO give each other quizzical looks before laughing too, and they go on to the next candidate.
You get smug satisfaction for not going with "THAT Company who cant answer simple questions", until a reminder about the rent payment comes in due and all you want is a 30% pay increase over your last/current role.
Anecdata, but I interviewed for a marketing role at a 10-person startup in 2013. I asked questions #1, 2, 4, 5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 18, 19, and 20 - and the company was more than happy to 1) answer immediately, or 2) say "I don't know, but let me find out." I should have asked the other questions (especially the relo package!), but I was young, naive, and not tactful enough to ask tougher questions in a "cooperative" manner.
IMO it's insane to work for a company if they're evasive about the value of your equity (#4-8). That's tantamount to lying about comp. You can usually find out how much they've raised on Crunchbase, and you can napkin-math their burn by eyeballing the team (#9-13; payroll is the dominant expense for most startups). #14 seems like a weird question to ask, but YMMV.
I would take their answer to the product-market fit question with a heaping pinch of salt (what are they going to say, "no"? and PMF means something different to everyone), and listen closely to the "feedback from customers" answer.
This is such a short sighted perspective that it's laughable.
Good management will see that the candidate is thinking about joining the team as a long-term commitment and isn't just making a job change for a pay increase over their last/current role. It shows that candidate is showing up for the same reason the company exists -- to be fairly compensated for services rendered.
A leadership team that laughs at these questions are going to lose long-term, and should be avoided by potential employees and VC alike.
Edit: grammarz
If during the interview and negotiation process, a hiring manager (probably a large equity holder) at a startup company can't give me details regarding their equity, funding, board makeup, business strategy, work environment, competitors, challenges they're facing, and how I fit in to their strategy... why would I bother working with them? There are plenty of startup companies that will give me that information in order to sell me on joining them.
If they aren't serious enough to consider each hire vital enough to put some cards on the table, then I'm not about to waste my time working for them.
Further, there are plenty of non-startup companies I can go make a big paycheck at with 9-5 hours.
I'm on the management side (was CEO CircleCI, now CTO darklang) and we would absolutely answer all these questions. It's a complete red flag for any company that would recruit an employee without telling them what they're actually getting.
It's reasonable to keep the answers to Qs 4, 5, 8, 10, 11, 14 and 15 until later in the hiring process when you're close to an offer, so long as you give directionally-correct answers first.
Personally, I would answer everything except 5 in a first interview (and that's only cause I'd have to look up the exact numbers).
I've worked at two startups in the past. The first startup tanked. When interviewing for the next role, I did ask these questions, but had no luck. Ended up taking an offer with 15% increase over my last role. Two years of work, and I find out that this startup too, is on its way down. Eventually ended up moving to a big company.
I've noticed candidates who have had a bad experience at a previous startup often try to find a circumspect way to ask if we're profitable and if we're going to run out of money. Those are good and fair questions that I'm happy to answer.
I'm sure some companies would demure on some of these if the answers are uncomfortable. I hope not many would laugh!
For an engineering position I suggest candidates also ask if they can review some of the code they'd be working on like a recent pull request.
If you are worried about making rent, then perhaps your evaluation criteria would be different, such as "will this pay the bills, and will I be okay working here for the next 2 years."
But you and I both should let go of that bitterness and even forgive the liars if we're to move on as people. I'll quote an old saying, "Holding a grudge is like drinking poison and expecting your enemy to die."
It amazes me how different startup culture, and tech culture in general, is from the rest of the country.
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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 what we tell you, when we tell you, and you'll live with it. If you don't like it, you're fired. You are disposable, we do not need you, we can replace you in a matter of days with someone that'll happily shut up, sit down, and do as they're told.
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Then of course things like bonuses. I've never had a bonus at any job I've worked at in 17 years of W2 employment. Not once. In fact, I've never even had an annual cost of living increase just a 'merit based increase' at some jobs which is almost always less than inflation.
It’s true that if you’re not in a role where you have the ability to massively swing revenue for a business, you’re not going to receive the same offers. However, there are tons of opportunities out there beyond tech, people just need to want to go after them.
All that being said, situations are way different for traditional blue collar jobs and I get that. I wish my mom, who does not have a college degree, had the same negotiating power that I do, but she doesn’t. So, I help her out as best I can (she’ll probably live off and on with me for the rest of her life- 20 to 30 years).
Life across the globe comes with spectrums of challenges. While not comparable to lack of potable water, knowing the right questions to ask in a startup interview is still a challenge none the less.
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.
Companies looking to recruit and retain specific talent got creative with compensation packages in attempt to keep wages close to market.
I first heard of this during the dot-com boom in the 90's. Companies were paying "huge" signing bonuses.
Sadly I graduated after the burst, but after 9/11, and went into the defense industry. No signing bonuses, but did have a good relocation package.
I'm from EU, and worked for NA companies, and got most of that covered.