I've been thinking about low-friction options for getting a sense of the engineering quality. I don't think I'm alone in thinking that technical debt and bad software development practices are a top concern.
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
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 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).
I disagree with your checklist. Assuming you are interviewing for a very early employee (first 10 at most), then all those are technical issues that you will be able to fix. That's not a problem, that's your job and you are good at it.
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 disagree - tech debt and bad practices can be fixed with good leadership. But poor leadership will never give you the opportunities to make such corrections. I do agree that knowing the status quo is useful, but the trajectory the organization is on is more important than today's exact position.
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.
I'd like to say this is true, but I think in practice, you want early engineers to have the right technical + mental frameworks around good software development practices, and the current implementation may not reflect this (false negative). It's a good to have, but not a top concern imo.
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.
"How do you feel about Friday afternoon deploys?" is a great question for that. Many interviewers assume you want to hear about how they refuse to do them in order to protect your Friday night and weekend time. Really, the answer you want is that they've automated the deploy process and made it robust enough not to break production so it doesn't matter when a deploy happens.
I think if a company has good answers to these questions, then they aren't really a startup. More often than not, if they're hiring you (being quite senior) it's because they need you to do all those things.
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.
Most early stage companies would have had terrible answers to these questions. Including Facebook/Google/Uber/Amazon. Which just indicates that it might not have been an ideal role for you which is fair. Being the first 2-3 engineers at a startup is not everyone's cup of tea. The risk in most cases makes no sense for a sane individual. Your questions indicate a sense of "safety" that an engineer might want from their next gig.
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?
Idea: Startups, even moreso than mature businesses, behave similarly to organisms and exist on a fine balance between life and death. Corollary #1: all startups, almost definitionally, have the maximum amount of technical debt possible without dying (otherwise they would "move faster and break more things"). Corollary #2: Startups whose core business is selling to developers (as opposed to applications of software) are much more sensitive to technical debt.
> 2 - To see a sample of their production systems stdout & stderr
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)
>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 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.
I disagree. The most common way to predict payout is to compare to other companies' exit valuations.
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.
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 spending years of putting in time and a half seems in order.
I think your overall point is fair -- you own less, but of a more valuable asset now, so you should come out ahead. However, in my experience the ones that say dilution doesn't matter are often the ones that are likely to be "made whole" at dilution events or have anti-dilution protections. If you're not experiencing dilution the same way that rank-and-file employees are, I think it's a bit disingenuous to tell them that it doesn't matter.
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.
It's important to note dilution events because startups typically pitch their equity based on hypothetical future exit scenarios, without accounting for dilution.
It's not quite as straightforward as you're implying either. If you graph the total value of an employee's shares over time, dilution drops the value of that graph. You can say after the fact "look, after six months your total share value was higher than it started" but it doesn't change the fact that that graph has a big drop somewhere in it. If share price is constantly growing, dilution is always a bad thing for an employee. The pretense that they care about what percentage of the company is owned is specious.
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.
> I have no idea why dilution attracts so much verbiage that's out of proportion to its mathematical importance.
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.
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.
Always ask about the preference stack. You'll rarely discover anything interesting, but if you do, it'll completely change how you value your equity grant.
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.
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 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.
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 totally fine. I learned a ton right from the start, was able to make a big impact, and worked in the smaller "get stuff done" environment that I prefer over bureaucratic organizations.
valid: you do not enjoy big company politics. (you’d rather have small company politics)
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.
> You are getting a significant title bump that moves your career forwards.
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.
Salary - you would make (much) more at a big company.
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.
I guess this might fall under "You need experience and you have no other option to get experience.", but I ended up on the path of working for startups because
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!
> Learning - they will not have any formal training nor time to train you, so be prepared to self-learn.
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.
Is "stability" in terms of overall job security, or day-to-day chaos?
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.
I'd also ask questions to get a sense of the "soft skills" of the founders or whoever will be managing you. It's a truism, but "people quit managers, not companies."
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:
Major omission: Does the business model make sense to you?
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.
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 be to wait for a start-up to be "derisked" / 3-5 years old with a solid run rate above $100m in revenue.
The few success stories, such as Airbnb and Facebook, are the extreme exception.
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)
3-5 years old with $100M revenue is deep into unicorn territory already. I'm sure you can count companies that currently fit those criteria on one hand.
Bouncing off this comment with an example from the last job I worked at (a startup).
> 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.
And make sure you are present when everything is sent to the copier. If the boss tells you that he/she needs you to sign two copies, don't do it. The copy you receive could be a totally different document than what you signed for the company. If the boss insists on making a copy at home, don't sign anything either. Offer to meet at a Kinkos or something to copy stuff. You want to make sure you're getting the same document out that you signed.
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.
The list of questions is great but I don't think there is a way to get to this kind of information for the majority of candidates.
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.
FWIW, Germany specifically has complicated tax laws that make equity tricky. Namely: if your equity ever increases in value — e.g. if your startup raises a round of funding and gets a higher valuation — you owe capital gains taxes on the increase, even if the equity itself isn't liquid (which it might very well never be). There are workarounds, but they're a hassle. None of this is an issue in the US, where you're only taxed when you sell.
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)
I’d argue that even in NYC, people associate less value with equity compensation. But, when most of the multi-billion exits have happened in SV, isn’t this entirely justifiable?
I'd treat the specific questions here with a grain of salt but directionally the emphasis on making sure you inform yourself about the things you care about is good. I wouldn't expect that asking questions of the prospective employer is the best way to inform yourself about a lot of things though. A lot of devs for example could use some advice about options, how they work and what the tax consequences are when you receive or exercise options. Your prospective employer really can't give you this advice in any credible way - you need to seek it out independently and do your own research.
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.
The power dynamic: You're seeking a job and mostly at a younger/lower power position and might not be able to question the founder too much. It's the kind of soft power that the #metoo movement has talked about. Unfortunately, there are people who are ready to misuse that.
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.
> Cross-check with your friends how they feel about the company.
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.
I like this as a great starter list. When I joined my first startup 8 years ago, I didn’t know to ask basically any of these questions. I just assumed I’d work hard and get a Lamborghini some day (only half joking).
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?
I'm about to agree to join a startup, but reading all the comments made me hesitate.
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.
These are mostly offer stage questions. If somebody asked most of these in the opening interview I'd probably pass.
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.
> 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.
> A good rule of thumb is 25% of take home pay should go towards housing and up to 40% in the Bay Area. 40% can be done if you minimize costs like going out or have a second income.
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.
I am not seeing that this document addresses the important concept of timing. That is when to ask the questions. I am not certain that (as in any negotiation) it pays to ask everything initially. It would be like going out on a date with someone and hitting them with a list of questions prior to even having the dessert. Timing is critical. For one thing depending on how well they like a candidate they might be more likely to agree to something that they initially say they can't do. Especially once they have invested enough time.
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).
I think it’s important to note that in many situations, money > equity.
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.
Awesome post. Definitely good timing as I was about to start an Ask HN around this as I go through the process.
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.
>> Technically there are 23 questions but I grouped the last one together as a question for new potential teammates. Also 23 questions to ask before joining a startup didn’t have as good a ring to it.
This is great if the assumption is that the startup will be successful, however given the failure rate it feels like the focus should be on risk management. How much risk should I as a developer be willing to invest knowing that statistically things might not work out.
Additionally, it would be great if there was material like this that was much more approachable by someone early on in their career.
With regard to equity, I wouldn’t join a startup unless it’s cheap for me to buy the options. If you get your cliff, and it costs 50k to buy your options, you are sol. You options are to throw away your equity, or be stuck at a shitty job.
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.
I think this is unnecessarily cynical. A third option is to keep plugging away at a great job in a great company. If at 1 year, you find yourself at a shitty job and/or shitty company, leave ... regardless of what the options cost. And who cares if they are cheap then. Shitty company = going nowhere. Any money spent exercising is money thrown away, which is even worse than walking away from it.
Your decision point around the cost of those options seems poorly thought out, besides being a victim of a false dichotomy.
There are no engineering questions on this list, and the more I think about it, the more correct I think that is. Unless you're stretching the definition of a startup, most of what passes for current engineering is volatile and subject to lots of change. Better to ask questions about the team and their experience so you know what you'll need to build.
I guess the only real valid question that you can ask in this situation is "Does anyone here currently contribute to the code?". If the answer is yes, start asking questions about the dev process. If the answer is no, then they're trying to use you for a cheap "computer person" and you should move on.
I remember a similar list of questions being posted in the past that were for any engineering position. Couldn't find the one I was looking for but this was posted a while ago and seems pretty nice: https://www.keyvalues.com/culture-queries
Here's some advice. Don't feign passion. If you could give to shits about the product wait for a better opportunity. Next. Your coworkers are competition. Treat them as such. Next. Ask for at least 20% more than you'd settle for but only after you receive an offer. Last. Don't become a JAP. You're welcome.
Questions 4 through 14 are likely not to be answered, or founders will be cagey about it. IMHO, if you get stiff-armed and you're applying to be in the first 10 employees, then run.
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's not clear to me if these are intended to be startup-specific questions only.
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.
+1 for finding out how much power individual board members have, although you may have to dig into the history of the startup, press releases, and ask rank and file staff members about recent events. The Board can easily kick out the CEO and anyone they hired without much notification.
In 2018+, it doesn't make sense to accept an offer that includes options without knowing how many are outstanding.
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.
Every startup that's offered me options or RSUs has told me (upon request) what percentage of the company that represents, or given me the total number of outstanding shares and let me do the math. They usually won't share a full cap table, but without knowing the total number of outstanding shares, the dollar value of a share is meaningless.
I'd just value the equity of any company that won't share this information at zero.
Ask that all payroll be secured for at least six months and paid through a third party. Had a founder pull all the money out in 2009 and I lost $90k in unpaid work.
"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.
>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.
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.
I don't understand why this comment is the top one right now. Has this been people's experience? I have asked all these questions (pretty much) and have gotten almost everything answered. Answers regarding revenues where a little obfuscate or a range was given.
The context of the probing questions proposed is that of joining a startup.
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.
> "We are a private company and don't share this information."
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).
So true! I've interviewed with several startups (about 50-60) in the past, over the course of 5 years. I had offers from most of them, while some of them rejected me after the interviews (for whatever reasons they had). Your comment is so close to reality (based on my interactions). Some laugh, some genuinely have no clue, some act arrogant (you can either join based on whatever limited information is provided, or leave), and some say they don't share any such information.
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 would answer all of those questions. I have, in fact, answered versions of many of them in interviews.
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.
Seeing this as the top comment, I expected the questions to be intrusive or silly, but I actually found them to be almost entirely the table stakes of what I'd want to know before joining a small private company that proposes to offset a lower salary offer with equity. You need these questions answered because it's a private company with no public disclosures you can look up!
I understand the cynicism behind this comment, but hopefully if you have one offer you are considering, you have a few more offers as well.
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."
This is ridiculous. The vast majority, of not all, of these questions are easily and readily answered by interviewers day in and day out. Not asking any of them is the read flag that makes people wonder if your even serious about taking the job or just there for interview practice.
This is not my experience. All of the private startups I interviewed for gave me this information when I asked during the final stage of the interview.
I think these are all reasonable questions to ask a startup with no established reputation. If all you want is a 30% increase, these startups are probably not the fit for you to begin with.
Most of the questions are appropriate to ask when an offer has been extended (but not yet accepted). There are plenty of high paying jobs at companies that can answer these questions.
It has not been my experience, coaching/advising a bunch of people through interviews with tech companies over the last few years, that most of this information is hard to get.
Assuming these questions are asked in the offer phase, I don't see a single question here that is out of line or which is even unusual. I have answered all of them myself.
If you need to worry that much about the rent payment as a software engineer in current times you either lack skill (in interviewing or on job) or sold yourself way under worth.
5 years ago this would’ve been awesome, I asked all of this to 5 employers in SF. Now in 2018 Silicon Valley we’re treated like chattle as coders/lower so I don’t see the relevance of any of these questions beyond signalling. You can be laid off at any time and for no reason or because of prejudiced liars who want you off the team. Call me jaded, I’ve been screwed at almost every startup and told simply that the pattern is me and left to die on the streets. My #1 question is how we feel about lying, followed by how much I get paid per hour (no salary, no options).
Maybe off-topic here, but: you sound very bitter, and that bitterness is no doubt understandable. I'm currently being pushed around at work by incompetent people who have lied routinely, and it stings. I'm sure the same has happened to many if not most people in the industry.
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."
(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 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.
---
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.
I think the dividing line here has nothing to do with tech or startups, and merely jobs where the employee supply is short of the employer demand. Or, higher quality workers generating multiples more revenue.
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.
latch|7 years ago
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
Waterluvian|7 years ago
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).
alain94040|7 years ago
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).
codingdave|7 years ago
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.
tzhenghao|7 years ago
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.
onion2k|7 years ago
madrox|7 years ago
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.
sarthakjain|7 years ago
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?
kodisha|7 years ago
- 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.
TuringNYC|7 years ago
https://www.joelonsoftware.com/2000/08/09/the-joel-test-12-s...
PS: Yes! Shockingly not all startups use source control.
dustingetz|7 years ago
blablabla123|7 years ago
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)
apl002|7 years ago
burtonator|7 years ago
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.
zoomablemind|7 years ago
xz0r|7 years ago
jasode|7 years ago
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.
PacifyFish|7 years ago
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.
convolvatron|7 years ago
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.
nirvdrum|7 years ago
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.
ummonk|7 years ago
habitue|7 years ago
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.
RcouF1uZ4gsC|7 years ago
unknown|7 years ago
[deleted]
SkyPuncher|7 years ago
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.
foobiekr|7 years ago
OliverJones|7 years ago
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.
jiveturkey|7 years ago
You can't pay your rent or buy groceries with vested options either.
MuppetMaster42|7 years ago
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.
gesman|7 years ago
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.
kapilkale|7 years ago
https://angel.co/blog/liquidation-preference-your-equity-cou...
jpmoyn|7 years ago
unknown|7 years ago
[deleted]
ironchef|7 years ago
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.
seibelj|7 years ago
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.
jakecodes|7 years ago
tdumitrescu|7 years ago
jiveturkey|7 years ago
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.
ken|7 years ago
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.
mbesto|7 years ago
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.
reaperducer|7 years ago
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.
foobiekr|7 years ago
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.
ummonk|7 years ago
The title bump rarely moves your career forwards.
sgustard|7 years ago
These questions have always guided me well.
ab992_throwaway|7 years ago
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!
sweezyjeezy|7 years ago
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.
XCSme|7 years ago
unknown|7 years ago
[deleted]
joezydeco|7 years ago
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.
amyjess|7 years ago
weka|7 years ago
This was me and I paid for it. Right now I'm on week 8 of 30 hour weeks. It sucks.
pcpcpc|7 years ago
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...
geophile|7 years ago
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.
eli|7 years ago
Asking about competitors is a great question though.
throwaway4000|7 years ago
The few success stories, such as Airbnb and Facebook, are the extreme exception.
jiveturkey|7 years ago
tdumitrescu|7 years ago
rangersanger|7 years ago
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?
dabockster|7 years ago
> 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.
bargl|7 years ago
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.
dabockster|7 years ago
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.
seige|7 years ago
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.
maddening|7 years ago
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.
lazerwalker|7 years ago
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)
pmart123|7 years ago
walshemj|7 years ago
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.
seanhunter|7 years ago
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.
jbaczuk|7 years ago
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.
nnain|7 years ago
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.
alliecat|7 years ago
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.
jph|7 years ago
wjossey|7 years ago
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?
aarongray|7 years ago
wfwefwef32|7 years ago
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?
Ensorceled|7 years ago
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.
jmharvey|7 years ago
arielm|7 years ago
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.
leroy_masochist|7 years ago
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.
ummonk|7 years ago
gist|7 years ago
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).
mygo|7 years ago
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.
an4rchy|7 years ago
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.
aestetix|7 years ago
Actually, I'd argue 23 has a way better ring to it: https://en.wikipedia.org/wiki/23_enigma
programjoe|7 years ago
Additionally, it would be great if there was material like this that was much more approachable by someone early on in their career.
aey|7 years ago
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.
jiveturkey|7 years ago
Your decision point around the cost of those options seems poorly thought out, besides being a victim of a false dichotomy.
walshemj|7 years ago
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.
jk563|7 years ago
jiveturkey|7 years ago
madrox|7 years ago
dabockster|7 years ago
balls187|7 years ago
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.
mavsman|7 years ago
balibebas|7 years ago
mbesto|7 years ago
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).
pk455|7 years ago
sarthakjain|7 years ago
ken|7 years ago
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.
itronitron|7 years ago
unknown|7 years ago
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jiveturkey|7 years ago
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.
xivzgrev|7 years ago
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.
jiveturkey|7 years ago
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.
nostrademons|7 years ago
I'd just value the equity of any company that won't share this information at zero.
ChicagoDave|7 years ago
karma_hard|7 years ago
- 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?
gammateam|7 years ago
"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.
dyim|7 years ago
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.
deedubaya|7 years ago
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
8ytecoder|7 years ago
crusso|7 years ago
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.
pbiggar|7 years ago
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).
aecs99|7 years ago
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.
eli|7 years ago
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.
hharnisch|7 years ago
sanderjd|7 years ago
balls187|7 years ago
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."
rco8786|7 years ago
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madrox|7 years ago
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harlanji|7 years ago
i_am_nomad|7 years ago
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."
ryanmercer|7 years ago
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 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.
---
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.
wjossey|7 years ago
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.
JJMcJ|7 years ago
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.
balls187|7 years ago
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.
kodisha|7 years ago
I'm from EU, and worked for NA companies, and got most of that covered.
tudelo|7 years ago