I believe that there are many things that should be seriously considered before joining a startup. I'm wondering if that would be a good idea?
Maybe there is someone else who considered going to startup as an option or did it already after working at VMW?
3 replies (most recent on top)
I would say the most important thing for a startup is that unless you are in there A round or before, it is likely not going to be worth your while. Generally the options offered after that are not as good (think each stock being valued at pennies or less vs. 75 cents or more). I say this because they founders/hiring team will also ask that you make significantly less than you would at a stable company (share the risk / share the reward mentality). Of course they will also say "well, we can pay you more if you take less shares" which implicitly means "hey when we make out like barons you are going to be missing out!".
The point is that you should determine what you want to be making salary-wise and not take much less than that, enjoy the work and company, and if you end up making significant money at the end, it's a bonus. But don't ever think you will automatically be that other person you know who made big money at 2 startups in a row. This is actually very rare, though most people probably know someone...
I have been at two startups. My advice? Don't go to one unless they have cleared their final round of funding and are more or less stable. I have been at two startups. Both were a lot of work. Both ended in total failure. Most startups do not make it. So its risky.
I've done 2 in the past.
1- that ended when we were bought for low value. investors (VCs) barely got 1/2 their cash back. 90% of employees were gone when that happened. But it was fun while it lasted!
2nd- got bought for a profit! VCs made out good (not facebook, google going public good, but good) Every employee was in the money on their Options. So even the newest guy got like 15 or 20K when we closed. More Sr engineers (me) wound up with several hundred grand in cash from our options and a couple of hundred in RSUs with the new company (vested over 3 years).
Startups, if you are in their first year or two, just assume you have to dedicated 5-7 years to them. Very few cash out huge after 2 or 3. You need that 5-7 to show growth and adoption of the tech along with how its finances work (how much money are they making).
I had more fun in my startup years than I ever had here at VMW or the other vendor that bought us from Startup #2. Pay is market but not huge. The payout if it works is generally great. But the real thing is you are in a team of 50 or maybe 100 total. Your impact to product is much bigger. Startups generally don't deal well with B or C players, and they get dropped to be replaced with A's or B minus minimum. So thequality of people is often good.
You have to take the risk. Most VCs assume the rule of 3rds. 1/3rd will fail and be complete losses. 1/3rd will break even or make a little money. and the Final 3rd is the rock stars that make 4 or 5x investment in 5 years and pay for everyone....
I love it. I love people focused on making and selling what I make. I dont need other distractions I just want others that believe in what they do and focus on that. I'll be getting my severance and looking for my next startup... (and I'm 48! Its not just a young persons game)