If you want to join a startup especially in the valley, make sure you check this out
For many, launching a startup might be the dream. But in a recent post I wrote, I gave another perspective that perhaps joining a startup might be more lucrative depending on your situation.
There is a tonne of reasons why you should join one after all — high growth, fun culture, meaningful work, and the list goes on.
However, many soon realize that working at a startup can be tricky, especially from a completely different background. It’s a high-paced environment where you’re expected to pull your own weight and put on a lot of different extra hats on.
Especially during the pandemic, taking a jump into the startup life has become an even bigger risk than ever before. On top of competition from other businesses in the same segment, this will always make jumping to a smaller company a more significant risk.
This is why evaluating yourself, the offer, your team, and the startup itself is essential when seeing if you want to jump ship into something new (if you’d like to see a video going through it, check it out below otherwise keep on reading).
I decided to write this up from personal experience, especially my learnings when I rejected a management position at a Series B startup. I asked my mentors, friends, work colleagues, and even senior executive people to uncover what the best decision would have been.
Evaluating an offer has many parts including remuneration, equity, and more. Hopefully, by providing some personal recounts you better evaluate your offer.
Let's Get Into The Offer Breakdown
Arguably, the most important part of jumping ship is the offer, which can mean the difference between accepting or declining.
One of the common misconceptions about joining a startup is taking a massive cut in salary.
This isn’t necessarily always true, so here’s what I would check for:
Can they match your current salary?
In most cases, if the startup is in a later stage, more than often, base salaries can be matched.
From the information I gathered personally, a startup should be close to matching your salary around the Series B stage and above. If they aren’t, something’s up.
If the salary concerns you, it's a safer bet to stick to a later-stage startup versus an early one.
One of my favorite resources is Gitlab’s compensation calculator (they have a policy of keeping transparent). This is an excellent resource for checking anything from equity, salary, and more. You can also use something like TeamBlind as well to check or levels.fyi.
If the startup is in its early stages, most likely, a high salary isn’t something they can offer. Instead, most of the time, it’s career progression as well as equity into the business.
This brings us to the next point.
Is equity worth anything?
I’ve always had a mixed opinion on this.
When I evaluated my offer at the Series B startup, I consulted angels, founders, and other friends who leaped.
The verdict was 50/50.
Some said the equity means nothing, while others told me to calculate the real value of the equity and what it could project to.
Personally, I find that calculating what the equity is worth now and potentially in the future can tip you over to accept the offer, especially if the offer is generous.
Of course, an early-stage startup’s equity can mean absolutely nothing, but it’s also important to keep an open mind.
Many other things need to be considered, such as dilution, preference stocks, and more.
The most important question I would ask if you’re joining an early-stage startup (Pre-seed to Series A) is that understanding the percentage ownership could also determine your equity’s worth. Owning 10000 stock options in a company that issued 10 million means your stock can be worth very little when you decide to cash out.
This was one of the key reasons why I rejected my offer — they wouldn’t tell me the equity worth. This, to me, was a red flag which my mentors agreed too.
Evaluating an offer is never easy and can be a daunting process. Hopefully, this guide gives you a bit more on what to think about when approaching an offer