The Startup Checklist
Thinking about joining a startup? Here are some things to take into account when you’re considering that job offer.
I. Hard criteria: Finances, investors and products
These are good indicators of a company’s financial health and product strategy.
Cashflow
Working for a startup is less stressful if you know that it can make payroll. It’s rare that a company will give you an exact picture of its finances, but you should come away from interviews with some idea of how it’s funded and what its short- and medium-term objectives are.
Competitors
Does the company have a clear picture of who their competitors are, whether these are other companies or technologies that could disrupt their product/service/industry?
Which parts of their technology, if any, are covered by patents?
Investments and investors
Most startups that are actively recruiting have some venture backing. It’s good to know who these investors are, and in which other companies they’ve invested.
Having committed investors is usually a good thing, especially in industries that require a lot of capital.
However, some investors may have put significant funding into several different companies, while pressuring them all to perform to high levels. Statistically, not all of those companies will make it.
For the ones that do, the rewards are rich. For the ones that don’t, having to make good on a venture investment can result in stress (the bad kind), pressure to reach unattainable goals, and a toxic work environment.
Venture funding may not be right for a company that has a slower growth strategy or needs less capital. While you can’t do anything about this fit, you can ask around and see if the investor has similar investments elsewhere, and what the culture is like in those companies.
Likewise, if you learn that a current investor is exiting, ask why. Is the answer satisfying?
Fundraising
It’s always good to know if a fundraising round is on the books. Who, when, and why are important.
User metrics and growth
How many current users do the products have? How is product use defined? Are users engaged with the product? How is engagement measured?
How much is the user base growing? What challenges does the company face when it comes to growing that base? How does the company plan to grow the user base further?
Note any figures and projections, then take the time to do your own math. Are projections for growth realistic?
Likewise, are there pain points that would prevent people from adopting the product? Requesting demos or trial versions of the products can help you see challenges for user adoption.
II. Soft signals: Culture, teams and leadership
These criteria can tell you a lot about about whether a company is the right fit for you and your goals.
Customer service and ratings
What do users have to say about company’s products and customer service? Google reviews, specialist forums, and Google alerts can add a layer of insight to companies you’re considering working for.
Diversity
Is there a good mix of ages, ethnicities, and genders?
Did everybody go to the same school, or is there a diversity of profiles when it comes to degrees and skills?
Who are the board members? Same good mix?
Diverse environments are often richer, more rewarding places to work because they favor high levels of teamwork and trust-building.
Leadership experience
What is the leadership experience of the current team? Have they held positions of responsibility in larger companies?
More juniors and less leadership can mean more creative thinking and risk-taking, but sometimes it just means there’s no adult in the room.
Likewise, what are your expectations? Are you a strong individual contributor, or would you prefer to lead a team? Are there possibilities to do either right now, or to grow into a role later? And if you’re putting off a desired opportunity to get your foot in the door at a new venture, can you work with your future colleagues to create a plan for getting there within a certain time frame after joining?
Seniority
What is the team makeup? A group of friends just out of business school? C-level people who are leaving corporate life? Is the entire development team composed of juniors?
Seniority and team structure will affect how fast the company can grow after a certain stage. Past a very early stage, it’s good to have a mix of junior and senior profiles, especially for C-level functions.
Turnover
What’s turnover like? Are founding employees still around? Was there a mass exodus at some point? When and why?
Can you reach out to current and former employees in your network or through LinkedIn and get a feel for what it’s like?
Finally…
What does your gut say?
All ventures that require risk, whether professional, financial, or emotional, will leave the best of us with mixed-up feelings.
However, if something doesn’t feel quite right, try to figure out what it is. It may require more conversations, but they’re worth having before
One more thing…
Nicknames. If team members are encouraged or required to have silly nicknames, review everything and reevaluate. And possibly hightail it out of there.