Why 2023 should be your year to finally join a startup
There is no way to sugarcoat it…these times are rough. People are saying goodbye to colleagues they’ve worked alongside for years, the stock market has taken a hit due to the struggling economy, and anxiety levels at work are through the roof because nobody knows what’s coming next. So, the big question on everyone’s mind is: should you stick around or move on?
For a few reasons, I think now is the perfect time to take the leap and join a startup. Here’s why:
Big companies are no longer a guarantee of comfort and job security. With layoffs happening so often, even at the biggest tech giants, the once-reliable safety net of a big company is quickly unraveling. And short-term focus on boosting quarterly earnings only adds to the insecurity of employees.
Startups, on the other hand, aren’t directly tied to the stock market like public companies are. A well-funded startup with a healthy cash runway will be hiring, even in a down market. While they’ll be more mindful of their cash burn rate, their primary goal is growth and hiring.
Public companies aren’t offering the same level of compensation they once did. Tech workers, in particular, have seen a big drop in total compensation due to the recent market downturn, which has hit tech companies hard in the stock market. If you’re considering a change, now’s the time to check out a startup. Despite the down market, there’s still financial upside to joining a startup over a public company.
One of the main financial incentives of joining a startup is the potential for meaningful equity in the company. As the company grows and becomes more valuable, so too does the value of your equity stake. If the company goes public or is acquired, your equity stake can potentially be worth a substantial amount of money.
Joining a startup can almost be a cheat code to a fast-track career path :) When joining early and earning the trust of leadership, it’s much easier to present your own ideas and implement them, collaborate with teams outside of your core role, and opportunities to move into management are more frequent.
“I have always been drawn to the excitement and challenge of working in startups. So when the opportunity arose to join a small, fast-growing company as VP of Engineering, I jumped at the chance. The smaller, nimbler environment of a startup allows for more impact and ownership in the work I do. The pace of decision-making is much quicker and I have the ability to shape the direction of the company and technology in a way that was not as feasible in a larger organization.”
At big companies, it’s easy to get comfortable and lose the excitement of your work. With a startup, you’ll feel like your work is making a meaningful difference. You will be able to launch projects within weeks instead of months. You’ll have a real say in shaping the direction of the company and can have a voice with leadership. It’s a rare opportunity you won’t find at a larger organization.
“Upon completion of my studies at Stanford, I chose to join a start-up with peers and labmates as a founding engineer on day 1, rather than pursuing opportunities at established companies such as Facebook or Google, like many of my classmates. As a founding engineer, I’ve led various initiatives and departments from zero, weave between our business and technology needs, and hold a meaningful role in leadership. This experience has been immensely fulfilling.”
— Robert Sun, Founding Engineer at Dexterity
If you ever envisioned yourself starting your own company, joining an early-stage startup is a great training ground for becoming a founder. While at big companies, you are siloed into a particular function, at a startup you’re forced to get into the weeds in a lot of different areas outside of your core role. This will broaden your skillset and understanding of building a tech company. Also, jumping into the startup world allows you to build a network of entrepreneurial people.
“I joined Square when it was around 50 people and right as it began to grow rapidly as a product and business. That growth created countless opportunities for me to take on projects and responsibilities that, at a large established organization, would never have been entrusted to someone without years of experience. I could really stretch myself and learn and grow much faster as a builder of products and teams than I would have in other environments. That early hypergrowth experience provided many of the insights, principles, and practices I rely on every day building my startup.”
— Michael White, Founder and CEO of Multiply
So, what should you look for when choosing a startup?
One of the main concerns people have about joining a startup is the perceived lack of security. While there are certainly risks involved, you can minimize those risks by doing your due diligence.
First and foremost, make sure the startup has a solid financial foundation. They need substantial funding and cash runway to weather the current market conditions. A good rule of thumb is to look for a company with at least 18 months of cash runway, as raising funding may be more challenging in this climate.
Next, evaluate the leadership. Good leadership is always important, but even more so for a startup. The leaders will set the tone for the company culture and determine the direction the business will take. It’s important to look for leaders who prioritize growth and employee well-being, rather than just growth at all costs. Sound leadership also attracts high-caliber talent, which is a significant contributor to a company’s success.
It’s also important to understand the growth potential of the business. Are they addressing a real problem with a large market? Do they have a clear path to profitability? What does their current revenue look like? Make sure you take a look at their revenue growth to see if the company is developing at a good pace. While many startups have great ideas, not all of them have a solid business plan.
Finally, it’s a good idea to learn when the company last had its last round of funding. This will give you an idea of the company’s worth and help you understand the accuracy of the equity value presented in an offer. The more recent the valuation, the more reliable the equity value will be.
So, what are you waiting for? With job security being less certain and equity compensation rapidly changing, now is the perfect time to take the leap and see what’s out there. We have a plethora of exciting startup opportunities for both early and growth companies on our KP Jobs Board. Also, please join our KP Talent Network to get the most up-to-date information on what’s happening within our portfolio. Let’s go!!🚀