Questions to Ask Before Joining a Startup

I&#x27;ve been thinking about low-friction options for getting a sense of the engineering quality. I don&#x27;t think I&#x27;m alone in thinking that technical debt and bad software development practices are a top concern.<p>Being quite senior now, I&#x27;d feel comfortable asking:<p>1 - To see their CI dashboard<p>2 - To see a sample of their production systems stdout &amp; stderr<p>3 - Asking to review a recent non-trivial commit (with the person&#x2F;people who wrote it)<p>4 - If you&#x27;re interviewing remotely for an on-site position, finding out if they have an open office<p>5 - Finding out how they do deploys &#x2F; devops

<i>&gt;It is also important to note that early employees experience more dilution events. An example of a dilution event would be raising another round of funding. This is another reason why joining a company early should offer more equity.</i><p>I disagree that it&#x27;s important to note that early employees experience more dilution events. I know you&#x27;re trying to educate but this type of advice unintentionally <i>misinforms</i> people and causes people to pay attention to the wrong thing. Ultimately, the more important math is <i>number_of_shares multiplied by share_price</i>. As long as that goes up, dilution is not as important. What employees will care about is whether the <i>total money wealth went up</i> and not whether their 5% ownership turned into 4% because a new investment round bought 20% of the company. I have no idea why dilution attracts so much verbiage that&#x27;s out of proportion to its mathematical importance.

This is good stuff.<p>I want to emphasize one point. A company may offer you options, or restricted stock units, or any sort of equity in the company.<p>When they do this, they are asking you to invest in the company. They are asking you to buy your shares with your scarcest resource: time.<p>Do NOT be the slightest bit embarrassed to ask any question you want about the company&#x27;s capital situation, funding prospects, premoney valuation at the last funding round, amount of &quot;runway&quot; left before they need revenue or another round of funding, names of major shareholders, preferred shares outstanding, etc.<p>Warren Buffett would ask lots of questions if they asked him to invest; so should you. Mr. Buffett probably would ask better questions, but that&#x27;s OK. The company should encourage questions from YOU: they&#x27;re asking YOU to invest.<p>If they bristle at your questions, it&#x27;s a red flag. They may say, &quot;look, that&#x27;s confidential, can&#x27;t answer specifically,&quot; and that&#x27;s OK. But they shouldn&#x27;t get annoyed.<p>And, remember, you can&#x27;t pay your rent or buy groceries with unvested options. You need cash money for that.

Option piece is misleading.<p>You own 1% of options and company is bought for $10m.<p>Your payoff?<p>Likely $0.<p>He forgot to mention preferred shares given to VC’s with liquidation preferences that likely never disclosed to new engineers.<p>This is what makes new engineer to sacrifice his salary for a possible liquidation even that likely either never happens or there is no money left for him after VCs took their xN ratios off the payoff.

The only valid reasons for working at a seed-stage &#x2F; series A startup:<p>You are a founder.<p>They are working with a technology or in an industry that you specifically want to work with and it is very hard to work on it professionally, and doing side projects are infeasible.<p>You need experience and you have no other option to get experience.<p>You are getting a significant title bump that moves your career forwards.<p>Invalid reasons for working at a startup:<p>Equity (getting rich off stock options) - this is very likely to be worthless unless you are a co-founder.<p>Salary - you would make (much) more at a big company.<p>Work life balance - you will work harder than you ever have.<p>Stability - does not exist.<p>Benefits - very bad.<p>Learning - they will not have any formal training nor time to train you, so be prepared to self-learn.<p>---<p>All that said, I enjoyed my time as an employee at multiple startups. Just go in for the right reasons and your eyes wide open.

I&#x27;d also ask questions to get a sense of the &quot;soft skills&quot; of the founders or whoever will be managing you. It&#x27;s a truism, but &quot;people quit managers, not companies.&quot;<p>There are tons of resources online for questions to ask, and I think the company&#x2F;viability questions from the post are good, but I would add to them some of these types of questions:<p>How you will be managed&#x2F;evaluated and the mission of the company: <a href="https:&#x2F;&#x2F;www.themuse.com&#x2F;advice&#x2F;8-questions-most-people-dont-ask-hiring-managersbut-you-should" rel="nofollow">https:&#x2F;&#x2F;www.themuse.com&#x2F;advice&#x2F;8-questions-most-people-dont-...</a><p>How your founder&#x2F;manager will navigate conflict, which is inevitable: <a href="https:&#x2F;&#x2F;www.thebalancecareers.com&#x2F;interview-questions-to-assess-conflict-resolution-skills-1918500" rel="nofollow">https:&#x2F;&#x2F;www.thebalancecareers.com&#x2F;interview-questions-to-ass...</a>

Major omission: Does the business model make sense to you?<p>More specifically: Is there a demand for the product? Are there competitors? If not, why not -- are you sure the product is actually something that somebody wants? If there are competitors -- how will your startup compete with them? Do you trust the people running the company to guide it to success, either directly, or because they have plans to hire people who can? Is the technology feasible, or are the founders embarking on an R&amp;D project?<p>There are no guarantees of course, and you can learn a lot and have fun at a startup that fails, but do your best to join with your eyes wide open.

Having worked at several start-ups, I&#x27;d say the employment risks are not worth the cost. In most of my cases, when the start-up hasn&#x27;t raised enough money, you end up with a poor work environment - pissed off&#x2F;stressed bosses, weird work hours, &quot;do anything&quot; to save the business mentality... Generally layoffs&#x2F;firings occur pretty abruptly and you&#x27;re left filing for unemployment without a &quot;thank you&quot;. My advice would be to wait for a start-up to be &quot;derisked&quot; &#x2F; 3-5 years old with a solid run rate above $100m in revenue.<p>The few success stories, such as Airbnb and Facebook, are the extreme exception.

Major Omission: People<p>Ask yourself-<p>Do I trust the founders?<p>Can I have healthy debate with the founders?<p>Will my feedback be considered by the founders?<p>Am I compatible with the founders?<p>Are the founders compatible with each other and are they able to work together constructively?

Get. It. In. Writing.<p>I will say this much. People have bad memories. That includes you. You think you remember that conversation perfectly? You probably don&#x27;t.<p>Get. It. In. Writing. And don&#x27;t trust anyone who won&#x27;t commit to writing.

The list of questions is great but I don&#x27;t think there is a way to get to this kind of information for the majority of candidates.<p>1) A startup with marginal success and showing growing signs can simply ignore you and your questions and move to the next candidate. Startups where all these ducks are in a row has a strong candidate pipeline and they simply move on. You run the risk of standing out not as a diligent person, but as someone who is meddling in issues beyond his&#x2F;her means.<p>2) A startup willing to divulge all this and walk the extra distance for you is probably too raw and desperately short of talent. When you get hold of all of this information, you might feel this startup is not worth it, given you now know where the skeletons are buried.<p>In the end, you really kind of have to wing it. Just like the VCs, the founders and everyone else is at an early stage of an endeavor. It is a high risk game, period.<p>My 2c is often towards ignoring all this math and doing your best to learn more about the founders, their motivation and if they will take care of you. Good founders always find a way to compensate you for your hard work whether by financial means or by paying it forward in other ways.

I believe that equity is mostly SF thing.<p>One of my friends works in a startup in Berlin where he was offered equity as one of the founders (10th engender or sth like that). Chances that he will be able to liquidate them in foreseeable future is non existing.<p>Nobody else that I know was offered an equity, even though quite a lot of my friends work for well funded startups. I worked in some and nobody offered me anything else but a salary.<p>If I relocated near SF? Sure, there would be a possibility. If I was a rockstar and one of first 5 cofounders? Also yes, but I am not famous.<p>I am really skeptical about any such post, as I saw myself that some strategies that works in Silicon Valley do not work anywhere else and I am not into moving to the most spoiled IT region in the world.

I&#x27;d treat the specific questions here with a grain of salt but directionally the emphasis on making sure you inform yourself about the things you care about is good. I wouldn&#x27;t expect that asking questions of the prospective employer is the best way to inform yourself about a lot of things though. A lot of devs for example could use some advice about options, how they work and what the tax consequences are when you receive or exercise options. Your prospective employer really can&#x27;t give you this advice in any credible way - you need to seek it out independently and do your own research.<p>Some of the specific questions are not great depending on cultural context. For example if someone joining my dev team asked me to pay to ship their car somewhere I&#x27;d ask them why they needed a car to code. But I&#x27;m in London, where having a car has marginal&#x2F;negative utility versus being essential in other places.<p>On the equity side, if someone asked these questions I&#x27;d know they don&#x27;t understand equity. What would really help is to see the cap table so you get liquidation preferences etc but you&#x27;re not going to get to see the cap table most places if you&#x27;re just going for a dev job. As it is, he says you might not get told the strike price on your options, which in many&#x2F;most countries your employer would be legally obliged to tell you as it&#x27;s part of the valuation of your comp for tax purposes.

A few comments from prior experience:<p>Equity in a startup is often used as a way to entice people to work without having to pay them market rates. If you suspect this is the case, definitely keep in mind that this equity could very well never be worth more than $0.<p>If you are interested in the value of the equity, then you have to be interested in the value of the business. You must understand whether you think the business value can grow. And this requires much more research and business strategy evaluation than most jobs offers.

The power dynamic: You&#x27;re seeking a job and mostly at a younger&#x2F;lower power position and might not be able to question the founder too much. It&#x27;s the kind of soft power that the #metoo movement has talked about. Unfortunately, there are people who are ready to misuse that.<p>It&#x27;s worse than when negotiating with a bigger company actually, cause there you&#x27;re just negotiating with HR department employees who would follow the law more closely. At a large corp, you largely get what you expect.<p>Be very wary of what you&#x27;re promised and told. I, unfortunately, was burnt by this. I largely trusted everything that I was promised&#x2F;told about the company performance. But it was all hoax.<p>So an additional tip: Cross-check with your friends how they feel about the company. Make this effort even if you are a bit introverted and don&#x27;t like discussing job offers etc with other people. Match what your research about the startup tells you with what the founders told you about the company performance. Look out for red flags.

Ask to see the pitch deck. A good startup will have a pitch deck that clearly explains the plan, market, team, and more.

I like this as a great starter list. When I joined my first startup 8 years ago, I didn’t know to ask basically any of these questions. I just assumed I’d work hard and get a Lamborghini some day (only half joking).<p>On the fundraising side, I’d add, “What is your fundraising steategy” when talking to the founders. This massively changes potential value calculations in terms of equity. I know some founders who are focused on not raising funds and pure profitability, others who are focused on growth by any means. Part of the calculus here is that by not shooting for more fundraising rounds, the founders may be signaling that they won’t be selling anytime soon. In that case, you should look to understand what your exercise rights are for your options. Do you have to exercise within 90 days, or is there a grace period?

More questions to ask before joining a startup: <a href="https:&#x2F;&#x2F;www.aaron-gray.com&#x2F;questions-to-ask-at-a-startup-interview&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.aaron-gray.com&#x2F;questions-to-ask-at-a-startup-int...</a>

I&#x27;m about to agree to join a startup, but reading all the comments made me hesitate.<p>But I don&#x27;t see a growth opportunity in a big company, the work is boring as hell and there are engineers, who joined 5 years earlier than I did, are still on same level as mine.<p>And the key engineering work is hold tightly by early members, unless they retire, I don&#x27;t see a chance.<p>And I want to do robotics. Although my current company is investing in the area, they only need people with the right background, i.e. PhDs in robotics. And I have talk with google recruiters, they let me choose a position before the interview, but all my selections are as boring as my current position.<p>Doing a startup seems to be only way?

These are mostly offer stage questions. If somebody asked most of these in the opening interview I&#x27;d probably pass.<p>My most important preliminary questions are all trying to get to root of one issue: Does this company follow a theory x vs theory y leadership model. So many companies out there claiming to be team oriented but in actuality are top down, my way or the highway operations.

&gt; How does the company collect feedback from customers?<p>I’ve read quite a few of these guides and they mostly focus on equity&#x2F;benefits but I think product&#x2F;market fit and feedback loops are a treasure trove for job seekers because they can show you the future as well as how focused the founder(s) are.<p>As a founder I’ve never been asked about feedback loops and rarely get asked about product market fit. We’re not technically a startup anymore, so that could be why. But I think those are useful questions for any company that isn’t a household name like Facebook or Apple.<p>What you should be looking for in an answer is whether it sounds like the company knows who it’s serving and is actively working to understand that audience even better.<p>Regardless of valuation, rounds of VC, or the flavor of popsicles you can find in the fridge, fit is what will ultimately get success. In my opinion&#x2F;experience.<p>P.S. - understanding everything else is also super important for _you_, but this is important to understand to tell if there’s a future in which those would be worth anything.

&gt; A good rule of thumb is 25% of take home pay should go towards housing and up to 40% in the Bay Area. 40% can be done if you minimize costs like going out or have a second income.<p>This is an interesting, and perhaps telling, assertion. 40% can be done if you minimize costs, not only in the Bay Area, but anywhere else. Thus, the implicit point here is apparently that the opportunity set in the Bay Area is so great that it&#x27;s justifiable to allocate an additional 15% of pretax income just to live there, relative to anywhere else on the planet.<p>I&#x27;m not sure if I buy that, especially within the context of taking a job that you&#x27;ve already been offered that has a defined comp package vs. moving somewhere to find a new job.

I am not seeing that this document addresses the important concept of timing. That is when to ask the questions. I am not certain that (as in any negotiation) it pays to ask everything initially. It would be like going out on a date with someone and hitting them with a list of questions prior to even having the dessert. Timing is critical. For one thing depending on how well they like a candidate they might be more likely to agree to something that they initially say they can&#x27;t do. Especially once they have invested enough time.<p>There is no clear answer for the correct time other than to not assume it&#x27;s simply ok to state everything upfront (vs. time wasted on the part of the applicant).

I think it’s important to note that in many situations, money &gt; equity.<p>90% of startups fail.<p>If you have two options, one being getting payed your preferred rate, and another being taking a huge pay cut for equity.. experience tells me to take the money every time and you’ll have made the right choice 90% of the time.<p>For most people money on hand today is way more important than future money that may never even materialize. And if you’re not most people, there will be future opportunities to buy into the company one way or another if you want to be an investor. You don’t even need to invest in the company you work for, there might be better investments that your real money that you get from the job can afford.

Awesome post. Definitely good timing as I was about to start an Ask HN around this as I go through the process.<p>I&#x27;ve also asked about early exercise (83(b)) and term sheets, if there are bad terms i.e. liquidation pref, anti-dilution etc but not all companies are willing to share this info.<p>Also, I am curious about why companies don&#x27;t just have a black box formula output generator, with your equity offer value, saying this is our projection and based on our current termsheet if the company exits at this value your options are worth X, with the option of dilution built in.

&gt;&gt; Technically there are 23 questions but I grouped the last one together as a question for new potential teammates. Also 23 questions to ask before joining a startup didn’t have as good a ring to it.<p>Actually, I&#x27;d argue 23 has a way better ring to it: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;23_enigma" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;23_enigma</a>

This is great if the assumption is that the startup will be successful, however given the failure rate it feels like the focus should be on risk management. How much risk should I as a developer be willing to invest knowing that statistically things might not work out.<p>Additionally, it would be great if there was material like this that was much more approachable by someone early on in their career.

With regard to equity, I wouldn’t join a startup unless it’s cheap for me to buy the options. If you get your cliff, and it costs 50k to buy your options, you are sol. You options are to throw away your equity, or be stuck at a shitty job.<p>Whether it’s worth it “to get rich”, is kind of a bs argument. If the opportunity exists to be a founder go for it, if not take the next best possible option.

I dunno how anyone else feels, but I&#x27;d add a 21 that&#x27;s pretty important to me. How is the startup planning on earning revenue?

There are no engineering questions on this list, and the more I think about it, the more correct I think that is. Unless you&#x27;re stretching the definition of a startup, most of what passes for current engineering is volatile and subject to lots of change. Better to ask questions about the team and their experience so you know what you&#x27;ll need to build.

I remember a similar list of questions being posted in the past that were for any engineering position. Couldn&#x27;t find the one I was looking for but this was posted a while ago and seems pretty nice: <a href="https:&#x2F;&#x2F;www.keyvalues.com&#x2F;culture-queries" rel="nofollow">https:&#x2F;&#x2F;www.keyvalues.com&#x2F;culture-queries</a>

Here&#x27;s some advice. Don&#x27;t feign passion. If you could give to shits about the product wait for a better opportunity. Next. Your coworkers are competition. Treat them as such. Next. Ask for at least 20% more than you&#x27;d settle for but only after you receive an offer. Last. Don&#x27;t become a JAP. You&#x27;re welcome.

Questions 4 through 14 are likely not to be answered, or founders will be cagey about it. IMHO, if you get stiff-armed and you&#x27;re applying to be in the first 10 employees, then run.<p>My general view is if you&#x27;re in the first 10 or so employees for a VC-backed startup, you deserve near-founder benefits (including financial transparency).

I&#x27;m looking at joining a seed-stage startup straight out of college as #8. What would be a good range for equity?

It&#x27;s not clear to me if these are intended to be startup-specific questions only.<p>It asks &quot;How does the company collect feedback from customers?&quot;, which sounds like a pretty generic question, but there&#x27;s nothing at all about working conditions, which I&#x27;d consider a top priority at any job.

+1 for finding out how much power individual board members have, although you may have to dig into the history of the startup, press releases, and ask rank and file staff members about recent events. The Board can easily kick out the CEO and anyone they hired without much notification.

&gt; This could be a difficult choice for someone who doesn’t have much cash on hand.<p>This is a vast oversimplification. The entire section on equity is very, very deficient and should just be disregarded.<p>This article is a fine start, but it still needs lots of work.

Have you actually had a startup tell you how many options are out there?<p>I&#x27;ve joined a few different startups all series B or later, and have asked at least 2 of them how many total shares there were. Neither would tell me.

Ask that all payroll be secured for at least six months and paid through a third party. Had a founder pull all the money out in 2009 and I lost $90k in unpaid work.

try those questions:<p>- do employees work overtime because they have to or because they want to? - what do you do to keep your employees happy? - whats the turnover rate?

the answer to every question on this list:<p>&quot;We are a private company and don&#x27;t share this information.&quot;<p>Outside of the room, the Engineering team laughs at your questions, Operations and the CEO give each other quizzical looks before laughing too, and they go on to the next candidate.<p>You get smug satisfaction for not going with &quot;THAT Company who cant answer simple questions&quot;, until a reminder about the rent payment comes in due and all you want is a 30% pay increase over your last&#x2F;current role.

5 years ago this would’ve been awesome, I asked all of this to 5 employers in SF. Now in 2018 Silicon Valley we’re treated like chattle as coders&#x2F;lower so I don’t see the relevance of any of these questions beyond signalling. You can be laid off at any time and for no reason or because of prejudiced liars who want you off the team. Call me jaded, I’ve been screwed at almost every startup and told simply that the pattern is me and left to die on the streets. My #1 question is how we feel about lying, followed by how much I get paid per hour (no salary, no options).

(I think it&#x27;s hilarious I&#x27;m being downvoted for making a factual observation...)<p>It amazes me how different startup culture, and tech culture in general, is from the rest of the country.<p>----<p>Every job I&#x27;ve ever worked at:<p>Relocation expenses? hahahaha<p>Equity? haha we&#x27;ll wave your brokerage fee to buy as our stock purchase program but if you wanna sell, you&#x27;ll be paying brokerage fees.<p>Responsibilities? You&#x27;ll do what we tell you, when we tell you, and you&#x27;ll live with it. If you don&#x27;t like it, you&#x27;re fired. You are disposable, we do not need you, we can replace you in a matter of days with someone that&#x27;ll happily shut up, sit down, and do as they&#x27;re told.<p>---<p>Then of course things like bonuses. I&#x27;ve never had a bonus at any job I&#x27;ve worked at in 17 years of W2 employment. Not once. In fact, I&#x27;ve never even had an annual cost of living increase just a &#x27;merit based increase&#x27; at some jobs which is almost always less than inflation.