Author Topic: Jump ship to a startup? (also, is this REALLY a "startup?)  (Read 2150 times)

fatchad

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Jump ship to a startup? (also, is this REALLY a "startup?)
« on: June 14, 2018, 09:42:15 AM »
Since I've seen a few similar threads and most of us here tend to have IT careers, here goes...

I'll apologize here for any ranting below :)

Currently working for a large corp. Since starting my professional career, this is all I know (previously retail, then first IT job was a smaller company). I've been looking into a tech startup, which is in a different industry, but seems to be looking for someone with similar job duties to what I do now. My main concerns are potential salary and working hours. Right now, I work a pretty solid 8 hours, though sometimes I work through lunch by choice/just don't feel like getting out lol. Occasionally, I'll need to work beyond this if workload dictates, but that is fairly uncommon - except for an on call rotation (may require zero work after hours, may get called at 2am every morning) and scheduled after hours maintenance every other month. I get paid extra for on call (regardless of work) and I usually get comp time for the other scheduled work.

First, I keep hearing (from current employees of this particular startup as well as general comments about startups) this is "not a 9-5 job". If I move forward with this startup, I'll definitely ask employees to elaborate, but I'd be interested to hear from those who have worked such a job what this means to you. I'm sure it varies, but I'd like to know what makes it not a 9-5 - long days? How long and how often? Are these surprises or do you at least know going into the day? Are working weekends common? How flexible is this? Is it not 9-5 because I might simply be on calls with other time zones/countries?

Sorry for rambling, but it helps me to get these questions down. The next part of the question is whether or not this is a "typical" startup. They've been around for about 7 years now and have just completed a large round of funding (20M+). They seem to be fairly established, in my uneducated eyes at least. So while I'll have to ask those who actually work there, does anyone have experience with a similar startup?

On the salary front, I'm slightly concerned as I'm officially "overpaid" by my current company's standards. Others in my dept in the same role make 15-20k less than myself (I negotiated well on my way in). I have no idea what to expect from the startup (again, who knows if it'll even go this far), but I do worry a bit about working (potentially) much longer hours for (potentially) a significant paycut (I assume most startups don't pay very well in comparison to a large corp, right?). This does have the potential to be a great learning experience if nothing else and it would significantly reduce my commute, but I'm slightly worried it'll invite additional stress into my life with erratic hours. Money isn't a struggle for me right now, but it's hard to walk away from what I make in relation to my hours/workload.

Any insight would be greatly appreciated! Let me know if I can offer any additional info :)


mxt0133

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #1 on: June 14, 2018, 10:57:29 AM »
To me this is company is more like a unprofitable company vs a start-up.  But my definition of a start-up is a company that is 2-3 years old, with very few employees and compensation includes equity.

The term start-up is used as more of a recruiting tactic, I have heard companies that have been around for 30 years say they are like a start-up with money to spend.  No, they are not a start-up.  Working for a smaller company has it's benefits, less bureaucracy, not being pigeon holed to one task, learning to be efficient with time and resources, and the comradery that you can build with your co-workers.  The downsides are if you ask about how many hours you will be working, the answer is however much to make sure the company doesn't run out of money before you are profitable.  Of course there needs to be some balance as people will naturally burn out, but the people that work in true start-ups know this going in and work life balance means work is your life.

If you are early in your career and have low expenses, I highly recommend working in a start-up you will learn much more in a shorter amount of time.  In a large corporation, which I started in, I was learning but at a much slower pace.  After three years out of college I was performing at a level to those that have been with the company for 15 years.  They basically had the same level of experience as me but they have been doing it for 15 years.  Which makes sense because larger organizations are more about process vs innovation.  They are more concerned about stability and keeping their existing customers happy vs building/creating to attract new customers.

The chances of the start up going bust is much greater but you will learn so much more and build your skill set that you can easily go to a larger corporation and take a more senior role based on your experience and skill set.

Syonyk

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #2 on: June 14, 2018, 12:21:34 PM »
First, I keep hearing (from current employees of this particular startup as well as general comments about startups) this is "not a 9-5 job".

Are you single, with no real social life, and think living at the office is awesome, in exchange for the (small) possibility of making obscene amounts of money?  Great!

Not something I'd recommend if those things don't apply, and an awful lot of startups don't make obscene amounts of money, so you've just worked yourself nearly to death for a couple years of crap salary.

FiftyIsTheNewTwenty

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #3 on: June 14, 2018, 01:31:22 PM »
I'll second mxt0133 above.  But...

How does this company look to you?  Does it really seem viable? 

If you don't get paid in real money -- ie, you're working largely for equity -- where will you be in a few years if the company explodes or fizzles out?  Not meeting your FIRE goals, which would be better served by a good salary now. 

Don't be impressed by funding.  Plenty of startups manage to keep getting funding, just to keep fiddle-farting around.

fatchad

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #4 on: June 14, 2018, 02:01:31 PM »
Thanks for the thoughts so far everyone.

As far as money, I have no intention of taking equity, that seems like an easy option for me to walk away from. I'm just shy of a 6 figure salary now, which I was asked about when speaking with the startup (early on in the conversation) and she didn't even flinch. Research on reported salaries does show that they are, IMO, paid well. Of course, the actual position I'd be shooting for was not one of the reported salaries haha, but it does give me hope. Again, I guess I'm slightly worried about my hourly rate taking a nose dive. I think actual employees would have to answer the "real" time commitment question.

As far as does this seem like a viable startup? I think so.Their client list seems to include some big names like Ford, Whole Foods, Audible, etc. I'm not sure what that's worth. They also have about 250 employees at the moment (again, still a startup?) with plans to hire 100 more over the next couple years.


DireWolf

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #5 on: June 14, 2018, 02:27:28 PM »
When they say it isn't a 9-5 job, they are sending you a warning. You'll be expected to sacrifice everything for the start up. It is not like a cushy large employer job. I've been there. It can be really rewarding if you believe heavily in the company and are wrapped up in the success via equity/stock options.

Also, be a little wary of start ups that have had a lot of rounds of financing. Early investors may want to cash out or even just write it off. I've been on the end of that twice. Once the company just shut. The other, the company was acquired by a public company so investors could cash out. Our employee stock was worthless. The new company took the cash, laid us all off and shut it all down.

PDXTabs

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #6 on: June 14, 2018, 09:59:01 PM »
I certainly wouldn't take a pay cut to leave your corporate job. I might be willing to work some more hours if those hours are more rewarding.

gerardc

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #7 on: June 14, 2018, 11:00:24 PM »
When they say it isn't a 9-5 job, they are sending you a warning. You'll be expected to sacrifice everything for the start up. It is not like a cushy large employer job. I've been there. It can be really rewarding if you believe heavily in the company and are wrapped up in the success via equity/stock options.

Also, be a little wary of start ups that have had a lot of rounds of financing. Early investors may want to cash out or even just write it off. I've been on the end of that twice. Once the company just shut. The other, the company was acquired by a public company so investors could cash out. Our employee stock was worthless. The new company took the cash, laid us all off and shut it all down.

Was your stock worthless simply because you had a very small fraction? Otherwise, how can the acquiring company only pay the early investors? I don't know how those rules work, but it seems complex.

DireWolf

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #8 on: June 15, 2018, 11:44:55 AM »
Apparently it all depends on the specifics of a companies plan. In our case, the plan apparently allowed the board to cancel everybody's options in a change of control situation. They paid off the largest shareholders/board members, and then the CEO and one of the other officers (CFO iirc) walked away with millions.

PDXTabs

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #9 on: June 15, 2018, 01:34:34 PM »
Apparently it all depends on the specifics of a companies plan. In our case, the plan apparently allowed the board to cancel everybody's options in a change of control situation. They paid off the largest shareholders/board members, and then the CEO and one of the other officers (CFO iirc) walked away with millions.

I think the operative word here is options. Some startups will give you RSUs instead.

Adam Zapple

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #10 on: June 16, 2018, 05:47:11 AM »
I have never been in this position, personally, but my wife has as have many of my friends.  My wife missed out on a huge payday in her first company because she did not have equity in the company.  She had to sit at work while her (now rich) employees were running around the office celebrating like they just won the lottery.  If she had been hired 6 months earlier, she would have been one of the "lottery winners."   Another friend just got a huge payday when his company was sold and managed to keep his job.

I am different than you in that I would never leave a large, stable company for a smaller company WITHOUT getting some equity.  Otherwise, I am taking on additional risk for little-to-no potential reward.  A smaller company is more likely to be bought out or fail.  I want to be compensated if the company is sold, instead of just laid off and left looking for another job with the rest of the suckers.

NorCal

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #11 on: June 16, 2018, 07:34:38 AM »
I've been in big companies, startups, and companies in between.  A few thoughts:

1. At least in the Bay Area, salary isn't much different between the two, unless you are talking about super tiny startups.  Once they've raised money, salary should be about the same.  Startups may not have the same level of benefits or bonus though.

2.  Work culture varies more by individual company (or even individual manager) than by MegaCorp vs. Startup.  Check Glassdoor for company reviews.

3.  Assume equity from a non-public company is worth $0 until proven otherwise.  I won't go into the crazy mechanics of ISO options, but just know that cashouts are extraordinarily rare.  Someone spending a full career in silicon valley startups might see one pay day, and the average of that payday is much lower than you think.  The options at my current startup might be worth $5-$10K, and that is WAY better than average.

4.  Hearing it's not a 9-5 job is a big red flag.  While there are few true 9-5 jobs anymore, such an up-front warning is something to be cautious of.  I've had extreme examples of working until 3am Sunday morning.  My current company can get snippy if I'm not responding to emails sent before 8pm.  Again, each company is different.  Crap like this is one of my major motivations for early retirement.

damyst

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Re: Jump ship to a startup? (also, is this REALLY a "startup?)
« Reply #12 on: June 16, 2018, 09:19:54 AM »
Having been there, I'll join the chorus telling you to avoid this specific deal.
Working for a startup can be a great experience.
If the right opportunity comes your way - one which you could become passionate enough about to justify longer hours and other sacrifices - then you should definitely consider it; but this one ain't it.
A 250-person company is not a startup in any practical sense. You don't get the exposure to the complete workings of the company that you would get if you were the first or fourth or even 20th employee.

I highly recommend the blog post below, which generated enough backlash for the author from the Valley startup scene that he elected to take it down:
https://web.archive.org/web/20160126190539/https://michaelochurch.wordpress.com/2012/07/08/dont-waste-your-time-in-crappy-startup-jobs/