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How to pick your startup job?

Frst is a seed-stage VC firm focused on supporting a new generation of French entrepreneurs with global ambitions.

Don’t miss the unicorn

You have just landed a job offer from Startup X — First of all, congrats!

But the joy is soon replaced by angst: Should I take it, or should I keep looking? I also have this process at Startup Y going on, should I wait? Not a week goes by without someone asking me for advice on variations of this nail-biting question.

It is nail-biting because most people have an innate sense of opportunity cost — or, as Auren Hoffman puts it:

As a potential hire trying to pick a great place to work at, you want to join a successful startup, because (i) great startups attract top talent so you will work with the best, and (ii) fast-growing startups mean that for yourself the sky is the limit, and a world of exciting opportunities will open up along the way.

A successful startup is defined by its capacity to find product-market fit, build a great product, and grow fast as a consequence of this.

The problem is that you are drastically limited in your capacity to benchmark and accurately assess the intrinsic potential of the startup you interview at:

  • you will probably interview at a very limited number of startups
  • you will only speak to a small number of people there
  • you will have very partial access (read: none) to detailed financial/business information
  • and in most cases there is very limited public information on that startup

With that in mind, I thought I would share more broadly the framework I always provide when asked how to reduce the uncertainty and stack-rank job opportunities — of course this assumes that you already have a great fit with the people you’ll work with, and that you resonate with the mission.

This framework is pretty simple: you need to Follow the Smart Money & Look at the Stage.

Let’s see what that means.

Follow the Smart Money

The good news for you is that there is one indirect but very powerful proxy to assess the startup’s potential: by following the Smart Money — i.e. by assessing the quality & mindset of the investors that back it.

The rationale behind this is simple:

  • Leading VCs are actually chasing the same companies as you, because their business model is to back teams that exhibit a strong blend of ambition, vision and execution to become massive
  • To top it off, in order to do that, they actually meet with hundreds of teams per year and only back a handful of them (and in spite of that they still make a few mistakes, so imagine what happens with even less experience)

Yes, that is correct — VCs actually do the due diligence job for you! So if the startup you consider joining has already managed to pass this selective test and attract smart money from a renowned investor, this is one of the best data point you can gather to help you assess the startup’s potential.

So now, how do you assess the investor? This is actually much simpler to do, because VCs tend to leave much more footprints.

In particular, here is what you should look at:

  • Check out the fund’s Partners & Principals online, and read their Medium/Twitter/Linkedin/blog posts/podcasts contributions; this is the best transcription of their mindset & investment strategy
  • Examine their existing portfolio — have they invested in other leading / renowned startups? An investor’s portfolio is the best representation of the investor’s DNA, but it also gives you a good view of the «peer group» you will be joining, and will have access to — which is a very important point for your learning curve & personal network
  • Check out the startup’s funding history (online or during your interview) to understand when did the last funding round happen. A fresh funding round (< 3 months) means the startup has a significant amount of time to deliver on its fundraising goals. On the contrary, a round that is 12–18 months old means the startup will probably need to raise a new round soon. It is both an opportunity (new projects & upward mobility opportunities for the best employees) and a risk (projects can be paused and hires suspended / cancelled when fundraising takes more time than expected) — in any case this is a great discussion to have with your future employer

Let’s touch briefly here on the topic of bootstrapped startups, that willingly decide to not go the VC route and self-fund their growth. Of course this is an absolutely fine way to build a startup too — You will need to do a bit more work by yourself to understand:

  • why have the founders decided to fund their company this way
  • how does it influence the way they want to build and grow their company
  • what does it mean it terms of career development opportunities for you

Look at the Stage

Early-stage startups are not smaller versions of big companies — The way the job is done and how the team operates change drastically across the various development phases.

So once you have “followed the Smart Money”, then it is crucial to Look at the Stage of the startup, to get a sense of what types of job are available right now, what you can expect next, and determine whether all this can be a good fit for you.

It goes roughly like this:

Pre-Seed/Seed — Finding Product-Market Fit

  • Product: no product yet, but the team is hopefully hard at work building it and talking to customers in iterative steps
  • Revenue: none
  • Typical round: 0,5–2m€
  • Team size: very small and mostly comprised of engineers, with a very limited number of spots for business people (and more relevant 6–9 months after the seed round)
  • Management method: This is a stage where founders can’t afford to spend time «managing» people, and where priorities may change several times within a week (not to say a day). As a consequence, whoever they hire needs to (i) be as “swiss-knife” as possible, (ii) be thriving in chaos and (ii) be capable of working autonomously with a get-things-done mindset
  • Titles: no titles needed :)

Series A — Commercial acceleration

  • Product: The startup has found its initial «Product-Market Fit», and has a growing list of customers/users
  • Revenue: starting at roughly 1m€ of revenue, growing fast (7%+ month-over-month)
  • Typical round: 5–15m€
  • Team size: Over the Series A the team will grow from ~10 to ~60, adding more varied and specialized profiles to the team, in particular within the sales, marketing and customer success teams. This is often also when additional people get hired in the product team, to bring more process & productivity to the product development cycle
  • Management method: fairly simple and narrow management layers are introduced, mostly in the range of 2–4 direct reports. Within the product/engineering teams you begin to see hives/squads being created, each with its specific mission & OKRs
  • Titles: do not expect CxO titles to be extended — this is mainly the realm of “Head of X”, reflecting the fact that most management roles are still very narrow, with a few more senior “VP-level” positions being staffed too on some strategic functions that are expected to grow/evolve particularly fast

Series B (& later) — Build and go international

  • Product: By this time, the startup should have cemented its Product-Market Fit and started to increase the product’s breadth and depth. It should also now be operating internationally (or poised to), therefore integrating new scale/security/product marketing constraints
  • Revenue: It should have passed the 3–5m€ revenue mark
  • Typical round: 20–40m€
  • Team size: 60+ to 150 at Series B & up to a few hundreds thereafter
  • Management method: the series B is the point where a startup needs to prove it has managed (i) to attract and develop top talent and (ii) that the leadership is filled/being filled with people that will be able to do 20x without sweating. You should therefore expect to see a strong culture and highly-functional and complementary leadership team, with several VPs being involved in the daily decision-making, and several layers of management. Central teams should have been built also (finance, HR, operations…), bringing more process and structure to the way the company operates
  • Titles: the full roster of job titles should have kicked in, with C-levels, VP/SVPs, “Head ofs” and many more

It’s all about the pick

The most awesome thing about fast-growing startups is that when things go right, they accelerate time and create so many opportunities that there is really no limit to your own career development path: each successful startup literally creates ~150 jobs over its first 3–5 years.

So your challenge is mostly to pick a great startup, be great at what you do, and keep seizing new opportunities as they appear.

I hope that this simple framework can help you pick the right one for you.

And by the way, talking about learning more about the investors:

Thanks to Pierre Entremont for his valuable feedback!

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Bruno Raillard

Bruno Raillard

Partner & Cofounder at Frst

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