Compensation Comes in Many Forms

Understanding the risks and making the leap to join a startup

Hello from NYC (again) — the city that taught me so much as a professional and uniquely provided insight for many of the relationships, conversations, and decisions I make today.

As an investor, I spend time speaking with talent that our portfolio is looking to hire. I had a conversation this morning with an individual that has a similar background to mine but struggling with the realities of joining a startup — lower cash compensation. It was a life altering decision for me at 26 to leave a well paying job, burn through savings, and be all-in on achieving a dream. I know I’m not alone in this and that the decision can be really uncomfortable.

The anxiousness of leaving “the known” especially when one is a consultant, banker, or corporate executive cannot be focused on cash compensation. Startups require different personalities, backgrounds, and skillsets in what can be dubbed a “pressure cooker environment.” This is what provides an individual a great platform for personal and professional growth. Where else can someone come make or impact key decisions around product, sales, or culture? The short-term compensation trade-off comes with knowledge and experience that are worth multiples in long-term gains — early hires/early fires, team dynamics, building a MVP, sales, scaling a team, and more! The best founders lean into employee goals and work to drive outcomes that contribute to them as well as company objectives.

It’s important to understand that the current cash compensation is temporary. In an event of a success, as a Series A round is raised, salaries approach market-rate. In the event of failure (and this is a very real risk in startups), one will have a great body of experience and lessons to point to — it is NOT a scarlet letter. However, one must know their risk tolerance and lifestyle aspirations and how startup compensation plays to that.

The “compensation” in joining a startup are numerous and not exclusively cash-related. I am glad I made the difficult decision and having weighed the decision, I can honestly say I spend my life truly doing what I love.

Originally from Issue 46 of the Dynamo Dispatch.

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