Startup Jobs


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Ask Dr Kumar to see if he can recommend any of his portfolio company
Check with IXL
What was your headcount 6 months ago, and what will it be in 6 months or 12 months from now?

Who are your investors, and when was the last round of funding?

What is the company burn rate, and what is the cash on hand?  What is your opinion on 
this burn rate?  What is your plan for acquiring more capital?  How close a we to the 
break-even point?  How close are we toward being profitable?  If we need to raise more 
fund from VC firms, what milestones are needed to make a compelling case to investors?

Has the company ever had a down, flat, or inside round?  Was there any prior CEO changes?

What is your role / title here?
What benefits do you offer?
What do you enjoy the most working here?
What is the current headcount?
What can be improve?  What are we trying to get better at?
What is the salary that you are offering for this position?
What is the number of shares / stocks that you are offering for this position?
What is the number of fully-diluted shares outstanding?
Do you offer 83b election?
What is the current size of the stock option pool?
Even if a startup is successfully executing, it can still face a cash crunch if it is not yet 
profitable.  Employees should ask to find out how much longer the company will ride without 
the infusion of another round of capital.  How much are they actually spending per month?  
What is the CEO's thoughts on the burn rate?  Does it feel high to him or her?  And what is the 
plan to mitigate that burn rate in the medium term?  If it is fundraising, what milestones are 
needed to make a compelling case to investors?

While the actual answer to these questions won't necessarily provide a definitive answer about 
the ability of the company to access both cash and additional capital, it will open up a discussion.

Down rounds, inside rounds, flat rounds, or CEO changes:

Any of these four events is an indicator that the startup has faced some difficulties in the past 
and may not be on track moving forward.  If one of them has occurred, prospective employees 
should seek out as much information as they can on the context of the situation.  After all, there 
are exception to the blind assumption that these are a black mark (e.g. a founding CEO stepping 
aside to make room for veteran management could be an indicator of successful growth; a 
change of product direction or market focus could require a flat round, etc.)

However, if any of these issues have occurred, it is a signal that you should dig deeper into the 
health of the business.

The details surrounding stock options are often complex and confusing for non-financially-oriented 
individuals.  The first place to start is to ask how many outstanding shares there are.  From that 
point, we can calculate the percentage of the company that you would own and better gauge the 
magnitude of this part of your compensation.  It's more important to know what percent of the 
total pool you own than the number itself.  The number of shares you receive is utterly irrelevant 
without knowing more numbers, and it is usually up to you to ask for them.

First, research and ask around to ensure that your number is in the same range as similar roles 
at other startups.  If you're an order of magnitude off, then you have a severe set of mismatched 
expectations either based on a lowball offer from the startup or based on your overly large ask.  
This isn't starting a relationship on a solid footing.

On the equity side, each startup has a fixed option pool from which they are drawing.  It could be 
running low, or it could have been recently "refreshed", but it's not necessarily the right signal 
within a negotiation to ask about this figure.

On the cash side, every startup will sing a song about being cash-strapped, and some of them really 
mean it.  The best proxy for how a startup views its cash spending is to just look at its office space.  
Are you in a dingy warehouse where the CEO sits on the floor with the rest of the company, while 
also lacking an administrative assistant?  Is the CEO in a corner office in a multi-story building with 
a nice view and an admin who answers calls and books travel?

Despite of your imperfect information about where there might be some wiggle room in the offer, 
there is a simple guide you can use to focus any negotiation of your offer.  For early-stage startup, if 
you are in a junior role, go for cash.  VC-backed startups have standard equity ranges and rarely 
deviate, and the risk-adjusted outcome of your equity is rather low if you push for cash.  For early-stage 
startup, if you are in a senior role, go for equity.  Your salary will be brought to market standards as 
the company grows, but this opportunity is a major bite at an equity piece.  Of course, this depends on 
your personal circumstances, such as whether you can afford to accept a below-market salary in 
exchange for higher amount of equity.

For later-stage startup, if you are in a junior role, go for equity.  The company's salaries are now at 
the market level.  You'll have more luck pushing for equity, which is more likely to be valuable too.  
For later-stage startup, if you are in a senior role, go for terms.  Push for cash + equity, but bring up 
other terms (vesting acceleration, severance) which can affect the long-term upside / downside.

Keep in mind that these are general guidelines, and many exceptions will inevitably arise, but hopefully 
this can serve as a direction.

Star employees will be "re-greened" (granted additional options) during the course of employment.  That 
said, it will always be on a new vesting schedule and rarely close to the amount of the initial grant.
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