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Questions to Ask Before Joining a Startup

777 points by hharnisch 8y ago

ryanmercer 8y ago
(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.
- kodisha 8y ago
  I guess you worked at more mature companies / corporate settings. Or EU. I'm from EU, and worked for NA companies, and got most of that covered.
- wjossey 8y ago
  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.
- tudelo 8y ago
  Hmmm, I think relocation expenses are pretty standard, but not as high as they may need to be if you need to break a lease or something like that.
  - hycaria 8y ago
    Any idea of the average (for the personal part of it) ? For a EU to US move ? With like 5 years of experience ?
    - quaunaut 8y ago
      It's worth noting that relocation expenses don't change too much depending on experience. They generally average around $10,000 from my experience, but it isn't paid out in advance, but usually as a reimbursement. Some companies will give you a card to do it on as a means of not having to be reimbursed, but even that's rare.
      - hycaria 8y ago
        Thanks for the info.
  - deleted 8y ago
    [deleted]
- JJMcJ 8y ago
  > Relocation expenses A large company with a senior level hire will have amazing relocation benefits. Friend had one at director level, everything was taken care of. At worker bee level, you're right, you might get two nights at a motel if you're lucky.
- balls187 8y ago
  It just comes to supply and demand, and being competitive in the market. 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.
wjossey 8y ago
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?
latch 8y ago
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 5 - Finding out how they do deploys / devops
- kodisha 8y ago
  In scenario of: - 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.
  - peterlk 8y ago
    I think I understand what you're saying, but I think you're oversimplifying, and that would do a disservice to people who may be new to the job market. Just because someone is a big name doesn't mean they're the right fit to lead a team - some of the best engineers I've ever met have no interest in leading teams, but are very valuable to have on the team. Hiring well, and believing in the team that you've hired is important, and I think it's a red flag to see management churn. 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.
    - kodisha 8y ago
      Exactly, thanks for clarifying. I've seen this behaviour where existing employees were forming a "cult" to cover each other, and promote one another, while technical debt piled up, and at the end basically brought products to a halt. I'm not saying that VIP hire is some magic stick that will fix everything, but if they consider a taboo to even mention such a thing, this is not a environment to be in.
jph 8y ago
Ask to see the pitch deck. A good startup will have a pitch deck that clearly explains the plan, market, team, and more.
jasode 8y ago
>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.
- PacifyFish 8y ago
  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.
  - doingmyting 8y ago
    I'm glad you said this. Many got burned including myself due to dilution events. When your 2% stake turns into 0.25% over time and you get paid last, there needs to be a very large buyout/IPO for you to get anything substantial. Add in the taxes paid on that and I would have been 10 times better working a corporate job with less headaches.
  - jasode 8y ago
    >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% 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. People would rather have $80k than $25k. The dilutions that dropped them from 0.025% to 0.008% is irrelevant trivia. 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%!
gesman 8y ago
Option piece is misleading. 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.
- jpmoyn 8y ago
  Can you elaborate on why your payoff is $0 if you have 1% vested common stock in the company?
  - i_am_nomad 8y ago
    Liquidation preferences mean that some shares have rights that others don't. In a liquidity event (IPO or acquisition), the people holding the "preferred" shares get paid out first, according to the number of shares and the valuation of those shares. If all the cash and other assets from the acquisition are given out to them, then anyone else holding the less-preferred shares get nothing. Usually, the founders and VC have the preferred shares, while someone writing unit tests at 3am does not.
    - detcader 8y ago
      I don't even understand what half the words here mean and the alienation of human beings still comes through. We can offer advanced college calculus in public high schools but we can't teach basic finance. I don't think anyone but a handful of workers at my job understands any of this
      - icedchai 8y ago
        If you can program computers you can definitely understand startup finance. It sounds more complex than it really is! Unfortunately, all the jargon confuses people and they wind up getting screwed...
      - 8y ago
harlanji 8y ago
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).
- i_am_nomad 8y ago
  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."
maddening 8y ago
I believe that equity is mostly SF thing. 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 8y ago
  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)
  - maddening 8y ago
    Well, I know people working not only in Berlin, but also in USA, just not in SF. One blockchain startup from Utah wanted to develop some advanced stuff, got investors hyped, ICO and stuff. 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.
itronitron 8y ago
+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.
jbaczuk 8y ago
A few comments from prior experience: 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.
deleted 8y ago
[deleted]
throwaway4000 8y ago
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.
- jiveturkey 8y ago
  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)
  - throwaway4000 8y ago
    i think we'll look back a decade from now and realize 90% of the start-ups from 2008 to present were small businesses in disguise with MUCH MUCH smaller markets than forecasted by founders. 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.
- tdumitrescu 8y ago
  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.
  - ummonk 8y ago
    I imagine they meant at least 3-5 years old.
aestetix 8y ago
>> 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. Actually, I'd argue 23 has a way better ring to it: https://en.wikipedia.org/wiki/23_enigma https://en.wikipedia.org/wiki/23_enigma
seibelj 8y ago
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.
- amyjess 8y ago
  I agree with you, though I'd say that this may not apply fully to late-stage startups in Series C or Series D.
  - seibelj 8y ago
    This is more seed / A stage. Once solid revenues are established it's a different game. I edited the original comment to reflect this.
  - JJMcJ 8y ago
    > late-stage 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.
- weka 8y ago
  > You need experience and you have no other option to get experience. This was me and I paid for it. Right now I'm on week 8 of 30 hour weeks. It sucks.
  - aw1621107 8y ago
jk563 8y ago
I dunno how anyone else feels, but I'd add a 21 that's pretty important to me. How is the startup planning on earning revenue?
- jiveturkey 8y ago
  https://www.youtube.com/watch?v=BzAdXyPYKQo https://www.youtube.com/watch?v=BzAdXyPYKQo
seanhunter 8y ago
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.
leroy_masochist 8y ago
> 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.
- ummonk 8y ago
  As long as the other 60% in the Bay Area is greater than the 75% elsewhere, you're better off in the Bay Area.
lcfcjs2 8y ago
The number one problem I have had at start-ups is lack of a real Product Owner. The CEO cannot be the product owner. This is a recipe for disaster.
geophile 8y ago
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.
- eli 8y ago
  Agreed, but this is sometimes very hard for a candidate to assess if they themselves are nowhere near the target customer. Asking about competitors is a great question though.
rangersanger 8y ago
Major Omission: People 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 8y ago
  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.
pcpcpc 8y ago
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: How you will be managed/evaluated and the mission of the company: https://www.themuse.com/advice/8-questions-most-people-dont-ask-hiring-managersbut-you-should 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-assess-conflict-resolution-skills-1918500 https://www.thebalancecareers.com/interview-questions-to-ass...
ken 8y ago
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.
wfwefwef32 8y ago
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. Doing a startup seems to be only way?
aey 8y ago
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.
- jiveturkey 8y ago
  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.
- walshemj 8y ago
  So you can do the sell some stock to buy the rest thing Nil Paid I think its called. 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.
  - kevhsu 8y ago
    it's a startup. your stock is not liquid.
    - walshemj 8y ago
      You only do it when there is a liquidity event
arielm 8y ago
> 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.
programjoe 8y ago
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.
bargl 8y ago
Get. It. In. Writing. 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 8y ago
  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.
mbesto 8y ago
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).
balibebas 8y ago
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.
aarongray 8y ago
More questions to ask before joining a startup: https://www.aaron-gray.com/questions-to-ask-at-a-startup-interview/ https://www.aaron-gray.com/questions-to-ask-at-a-startup-int...
jiveturkey 8y ago
> This could be a difficult choice for someone who doesn’t have much cash on hand. 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.
OliverJones 8y ago
This is good stuff. 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 8y ago
  > 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.
  - walshemj 8y ago
    You can leverage it in salary negations i.e. I have options on xxxx £1 shares of a private company which would only sell out at say 30x 40x. 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.
- MuppetMaster42 8y ago
  I agree wholeheartedly with your last point. 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.
sarcasm_heals 8y ago
These comments are fucking ridiculous. Please, by all means ask about the dev operations at a startup so that founders know not to hire you. You will sacrifice execution for enterprise best practices. You will over over-complicate every project. Web sites running perl cgi are still online today and pull more traffic than the shit site you were tasked to create with infinitely more resources.
gist 8y ago
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).
gammateam 8y ago
the answer to every question on this list: "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.
- aecs99 8y ago
  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.
  - duck 8y ago
    I don't think it would be a stretch to think the ones that can answer most of these would be the outliers that make it past two years.
  - sroussey 8y ago
    You must have been doing multiple interviews per month, every month, for those five years in order to get to the stage of getting an offer from a majority of the 60 companies. That sounds exhausting!
    - aecs99 8y ago
      I did. Once I joined the companies that did not openly answer my questions during interviews (about finances, strike price, etc.), I ended up realizing all the negatives/problems of the companies from the inside. Then on, I had only two choices: (1) ignore the problems and not worry about future, or (2) act fast and start interviewing until I have options if something goes wrong. I chose the second option, and hence a lot of interviewing.
pk455 8y ago
I'm looking at joining a seed-stage startup straight out of college as #8. What would be a good range for equity?
- sarthakjain 8y ago
  0.25-0.5
  - billconan 8y ago
    how do you know the number? is there a table somewhere?
    - jiveturkey 8y ago
      yes, it's at lmgtfy.com. snark aside, yes this is common info. Even as #8, for a fresh grad, 0.25 is probably quite high. Without looking at the standard breakout and also not knowing how strong a candidate the GP is, I'd guess more like 0.1.
deleted 8y ago
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karma_hard 8y ago
try those questions: - 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?
seige 8y ago
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.
mavsman 8y ago
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 https://www.keyvalues.com/culture-queries
Ensorceled 8y ago
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.
- jmharvey 8y ago
  The "Responsibilities" section is stuff I'd expect to ask/answer in an early round interview. But yeah, the rest is all offer-stage stuff.
  - Ensorceled 8y ago
    Very weird that those were the last questions on the list...
madrox 8y ago
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.
- balls187 8y ago
  I'd expect the engineering questions would be asked during the interview process, right? 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.
- dabockster 8y ago
  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.
xivzgrev 8y ago
Have you actually had a startup tell you how many options are out there? 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.
- nostrademons 8y ago
  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.
- jiveturkey 8y ago
  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.
an4rchy 8y ago
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.
mygo 8y ago
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.
ChicagoDave 8y ago
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.
nnain 8y ago
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.
- alliecat 8y ago
  > 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.
JenPK 8y ago
Do ask about the business model and how will they sustain in competitive market.

777 points by hharnisch 8y ago

(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.

kodisha 8y ago
I guess you worked at more mature companies / corporate settings. Or EU. I'm from EU, and worked for NA companies, and got most of that covered.
wjossey 8y ago
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.
tudelo 8y ago
Hmmm, I think relocation expenses are pretty standard, but not as high as they may need to be if you need to break a lease or something like that.
- hycaria 8y ago
  Any idea of the average (for the personal part of it) ? For a EU to US move ? With like 5 years of experience ?
  - quaunaut 8y ago
    It's worth noting that relocation expenses don't change too much depending on experience. They generally average around $10,000 from my experience, but it isn't paid out in advance, but usually as a reimbursement. Some companies will give you a card to do it on as a means of not having to be reimbursed, but even that's rare.
    - hycaria 8y ago
      Thanks for the info.
- deleted 8y ago
  [deleted]
JJMcJ 8y ago
> Relocation expenses A large company with a senior level hire will have amazing relocation benefits. Friend had one at director level, everything was taken care of. At worker bee level, you're right, you might get two nights at a motel if you're lucky.
balls187 8y ago
It just comes to supply and demand, and being competitive in the market. 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.

wjossey 8y ago

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?

latch 8y ago

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 5 - Finding out how they do deploys / devops

kodisha 8y ago
In scenario of: - 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.
- peterlk 8y ago
  I think I understand what you're saying, but I think you're oversimplifying, and that would do a disservice to people who may be new to the job market. Just because someone is a big name doesn't mean they're the right fit to lead a team - some of the best engineers I've ever met have no interest in leading teams, but are very valuable to have on the team. Hiring well, and believing in the team that you've hired is important, and I think it's a red flag to see management churn. 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.
  - kodisha 8y ago
    Exactly, thanks for clarifying. I've seen this behaviour where existing employees were forming a "cult" to cover each other, and promote one another, while technical debt piled up, and at the end basically brought products to a halt. I'm not saying that VIP hire is some magic stick that will fix everything, but if they consider a taboo to even mention such a thing, this is not a environment to be in.

jph 8y ago

Ask to see the pitch deck. A good startup will have a pitch deck that clearly explains the plan, market, team, and more.

jasode 8y ago

>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.

PacifyFish 8y ago
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.
- doingmyting 8y ago
  I'm glad you said this. Many got burned including myself due to dilution events. When your 2% stake turns into 0.25% over time and you get paid last, there needs to be a very large buyout/IPO for you to get anything substantial. Add in the taxes paid on that and I would have been 10 times better working a corporate job with less headaches.
- jasode 8y ago
  >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% 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. People would rather have $80k than $25k. The dilutions that dropped them from 0.025% to 0.008% is irrelevant trivia. 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%!

gesman 8y ago

Option piece is misleading. 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.

jpmoyn 8y ago
Can you elaborate on why your payoff is $0 if you have 1% vested common stock in the company?
- i_am_nomad 8y ago
  Liquidation preferences mean that some shares have rights that others don't. In a liquidity event (IPO or acquisition), the people holding the "preferred" shares get paid out first, according to the number of shares and the valuation of those shares. If all the cash and other assets from the acquisition are given out to them, then anyone else holding the less-preferred shares get nothing. Usually, the founders and VC have the preferred shares, while someone writing unit tests at 3am does not.
  - detcader 8y ago
    I don't even understand what half the words here mean and the alienation of human beings still comes through. We can offer advanced college calculus in public high schools but we can't teach basic finance. I don't think anyone but a handful of workers at my job understands any of this
    - icedchai 8y ago
      If you can program computers you can definitely understand startup finance. It sounds more complex than it really is! Unfortunately, all the jargon confuses people and they wind up getting screwed...
    - 8y ago

harlanji 8y ago

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).

i_am_nomad 8y ago
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."

maddening 8y ago

I believe that equity is mostly SF thing. 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 8y ago
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)
- maddening 8y ago
  Well, I know people working not only in Berlin, but also in USA, just not in SF. One blockchain startup from Utah wanted to develop some advanced stuff, got investors hyped, ICO and stuff. 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.

itronitron 8y ago

+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.

jbaczuk 8y ago

A few comments from prior experience: 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.

deleted 8y ago

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throwaway4000 8y ago

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.

jiveturkey 8y ago
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)
- throwaway4000 8y ago
  i think we'll look back a decade from now and realize 90% of the start-ups from 2008 to present were small businesses in disguise with MUCH MUCH smaller markets than forecasted by founders. 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.
tdumitrescu 8y ago
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.
- ummonk 8y ago
  I imagine they meant at least 3-5 years old.

aestetix 8y ago

>> 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. Actually, I'd argue 23 has a way better ring to it: https://en.wikipedia.org/wiki/23_enigma https://en.wikipedia.org/wiki/23_enigma

seibelj 8y ago

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.

amyjess 8y ago
I agree with you, though I'd say that this may not apply fully to late-stage startups in Series C or Series D.
- seibelj 8y ago
  This is more seed / A stage. Once solid revenues are established it's a different game. I edited the original comment to reflect this.
- JJMcJ 8y ago
  > late-stage 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.
weka 8y ago
> You need experience and you have no other option to get experience. This was me and I paid for it. Right now I'm on week 8 of 30 hour weeks. It sucks.
- aw1621107 8y ago

jk563 8y ago

I dunno how anyone else feels, but I'd add a 21 that's pretty important to me. How is the startup planning on earning revenue?

jiveturkey 8y ago
https://www.youtube.com/watch?v=BzAdXyPYKQo https://www.youtube.com/watch?v=BzAdXyPYKQo

seanhunter 8y ago

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.

leroy_masochist 8y ago

> 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.

ummonk 8y ago
As long as the other 60% in the Bay Area is greater than the 75% elsewhere, you're better off in the Bay Area.

lcfcjs2 8y ago

The number one problem I have had at start-ups is lack of a real Product Owner. The CEO cannot be the product owner. This is a recipe for disaster.

geophile 8y ago

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.

eli 8y ago
Agreed, but this is sometimes very hard for a candidate to assess if they themselves are nowhere near the target customer. Asking about competitors is a great question though.

rangersanger 8y ago

Major Omission: People 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 8y ago
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.

pcpcpc 8y ago

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: How you will be managed/evaluated and the mission of the company: https://www.themuse.com/advice/8-questions-most-people-dont-ask-hiring-managersbut-you-should 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-assess-conflict-resolution-skills-1918500 https://www.thebalancecareers.com/interview-questions-to-ass...

ken 8y ago

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.

wfwefwef32 8y ago

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. Doing a startup seems to be only way?

aey 8y ago

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.

jiveturkey 8y ago
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.
walshemj 8y ago
So you can do the sell some stock to buy the rest thing Nil Paid I think its called. 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.
- kevhsu 8y ago
  it's a startup. your stock is not liquid.
  - walshemj 8y ago
    You only do it when there is a liquidity event

arielm 8y ago

> 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.

programjoe 8y ago

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.

bargl 8y ago

Get. It. In. Writing. 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 8y ago
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.

mbesto 8y ago

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).

balibebas 8y ago

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.

aarongray 8y ago

More questions to ask before joining a startup: https://www.aaron-gray.com/questions-to-ask-at-a-startup-interview/ https://www.aaron-gray.com/questions-to-ask-at-a-startup-int...

jiveturkey 8y ago

> This could be a difficult choice for someone who doesn’t have much cash on hand. 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.

OliverJones 8y ago

This is good stuff. 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 8y ago
> 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.
- walshemj 8y ago
  You can leverage it in salary negations i.e. I have options on xxxx £1 shares of a private company which would only sell out at say 30x 40x. 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.
MuppetMaster42 8y ago
I agree wholeheartedly with your last point. 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.

sarcasm_heals 8y ago

These comments are fucking ridiculous. Please, by all means ask about the dev operations at a startup so that founders know not to hire you. You will sacrifice execution for enterprise best practices. You will over over-complicate every project. Web sites running perl cgi are still online today and pull more traffic than the shit site you were tasked to create with infinitely more resources.

gist 8y ago

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).

gammateam 8y ago

the answer to every question on this list: "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.

aecs99 8y ago
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.
- duck 8y ago
  I don't think it would be a stretch to think the ones that can answer most of these would be the outliers that make it past two years.
- sroussey 8y ago
  You must have been doing multiple interviews per month, every month, for those five years in order to get to the stage of getting an offer from a majority of the 60 companies. That sounds exhausting!
  - aecs99 8y ago
    I did. Once I joined the companies that did not openly answer my questions during interviews (about finances, strike price, etc.), I ended up realizing all the negatives/problems of the companies from the inside. Then on, I had only two choices: (1) ignore the problems and not worry about future, or (2) act fast and start interviewing until I have options if something goes wrong. I chose the second option, and hence a lot of interviewing.

pk455 8y ago

I'm looking at joining a seed-stage startup straight out of college as #8. What would be a good range for equity?

sarthakjain 8y ago
0.25-0.5
- billconan 8y ago
  how do you know the number? is there a table somewhere?
  - jiveturkey 8y ago
    yes, it's at lmgtfy.com. snark aside, yes this is common info. Even as #8, for a fresh grad, 0.25 is probably quite high. Without looking at the standard breakout and also not knowing how strong a candidate the GP is, I'd guess more like 0.1.

deleted 8y ago

[deleted]

karma_hard 8y ago

try those questions: - 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?

seige 8y ago

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.

mavsman 8y ago

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 https://www.keyvalues.com/culture-queries

Ensorceled 8y ago

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.

jmharvey 8y ago
The "Responsibilities" section is stuff I'd expect to ask/answer in an early round interview. But yeah, the rest is all offer-stage stuff.
- Ensorceled 8y ago
  Very weird that those were the last questions on the list...

madrox 8y ago

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.

balls187 8y ago
I'd expect the engineering questions would be asked during the interview process, right? 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.
dabockster 8y ago
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.

xivzgrev 8y ago

Have you actually had a startup tell you how many options are out there? 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.

nostrademons 8y ago
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.
jiveturkey 8y ago
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.

an4rchy 8y ago

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.

mygo 8y ago

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.

ChicagoDave 8y ago

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.

nnain 8y ago

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.

alliecat 8y ago
> 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.

JenPK 8y ago

Do ask about the business model and how will they sustain in competitive market.