How should one evaluate a potential startup to work at?
Which factors should be considered when applying to work with a startup? How should someone evaluate the company's team and potential for success? Answers from anyone with venture capital/startup knowledge or experience would be greatly appreciated.
1. Evaluate the founders. Not just their vision and business sense, but most importantly their personalities. In a startup you all have to work very closely and sometimes for long hours. Some of these guys will use you and exploit you to help THEM with THEIR vision. In other words, its all about them, and they'll dispose of you without a second thought if you don't worship at their feet. Watch out for the sociopaths because there are plenty in this business. Check their backgrounds. You'd be surprised how many have past legal troubles, including with the IRS.
2. Believe in the idea. Does this business resonate with you? Working with a startup often means sacrificing a lot of personal time, so it helps if you believe in what you are doing.
3. Check on the investors. Does the startup have intelligent and business savvy investors? If so, this is a great sign that the business has some potential.
4. Make sure you get a stock purchase agreement (options) on day one. Don't start with a promise that you'll get this in the future. Don't join a startup without one. The reason for this is that startups are looking for a quick exit. Which means one day they'll get bought out and you could be out of a job. If you have stock, then you'll sell your shares and get a comfortable profit.
5. Watch out for non-compete agreements and other contracts they spring on you that restrict your ability to work for someone else if they decide to fire you. Find this out before you start working.
6. Make sure you find out what your severance package will be if they fire you. In startups sometimes funding often starts to run low, and they have to lay off.
With all the negatives, startups are where I prefer to work. Nothing beats the challenge and the pride of doing work that really makes a difference in the company.
You can't evaluate a start up company, there is really nothing to evaluate. What you can do is evaluate the people that you are working with once you start to see if it is a place you want to continue to work at.
Great question Mr. Warden. My experience has led me to suggest that you primarily focus on these factors.
1. Passion for the Job - Make sure it is something that you passionate about or strongly believe in. It will typically entail longer hours, lots of trial and error, and a working environment that will feel as if you are always short staffed. That environment will be even more exhausting if you are not doing something that you really love.
2. Leadership - The leadership team will be key to the company's success. Identify and fully understand their vision, goals, character traits and especially what they think they know. A good leader will be able to identify their own weaknesses and strive to surround themselves with those that have the necessary level of expertise.
3. Financing - the level of financing and quality of the inventors will typically tell you a lot about what the financial world thinks of the business opportunity. Make your own assessment, but know that a start-up is only going succeed if they have enough financial support to get their business off the ground, and build enough momentum to become profitable.
4. Terms of Employment - Obviously you will need to evaluate all of the typical things like contractual agreements, non-competes, health insurance, vacation, etc. You can generally expect lesser benefits of scale such as health insurance, but will often receive more unique perks like being able to bring your dog to work or free meals. Just remember, the companies usually have a motivation behind the perks they provide. For example, companies that serve dinners in the evening are likely expecting employees to work late into the evening. At a start-up, you also have much more leverage to get stock options or RSU's because their is very little cost to the company unless the stock price rises. I have known many people that have benefited from joining start-up companies early on which have later grown into huge online retailers with stock prices now hundreds of times more valuable than their initial shares were worth. If you believe in the company, hold off on selling your shares if you think the value will continue to grow or you may someday regret selling them for something you probably didn't need in the first place.
Thomas a good question but the answer is not what you might think. Most people don't do this part right and find themselves giving up when the road gets rough. First and foremost understand that the business is NOT the end goal it is a vehicle to get you there.
With that in mind the first first step requires deep introspection, what is it that you'd like to achieve next OR better yet ultimately in your life? Once you understand the answer to this question then you can determine the ways that you might achieve this by starting a business. Make time on your calendar to work on research about this kind of business and DO IT!
Our SPARC process may help you better understand what to do. Here is a link: http://dinoeliadis.net/business-solution/
I hope this is helpful. - Dino
Hi Mr. Warden,
First question I would ask is:
a - Is the product/service something I would die to buy and consume at a repeated rate as a sustainable habit?
b - Is this a me-too product that is fighting for a slim market share or something innovative and patent protected?
c - Is the affordability across all demographics of the population?
d - Questions to evaluate the potential for success or risk of failure?
e - If he equity they offer is something I would like?
f - The time I invest there - would it affect my daily job and primary source of income?
g - List goes on and on...
We can discuss more of it if you are interested in an offline discussion.
In my experience - the most important things are the passion, experience, and past successes of the management team. If they are disorganized and lack expertise it will spiral through the organization and they will be their own worst enemy. Funding and customers come if they have a good process and vision to articulate their value. Economic variables are out of your control- you can't anticipate everything - sometimes luck and timing just aren't with you- but passion and discipline are critical to get through the challenges out of your control.
They can be dunned. Your chief concern is getting paid. If you work for a short period, say 2 weeks, and don't get paid, walk away. Some will try to get you to invest your "sweat equity" in lieu of future earnings. Others will cheat you out of weeks or months when venture capital disappears.
Obviously, if the startup is a spinoff of a major corporation, it seems more viable. About 90% of new small businesses fail, but that doesn't mean you can't earn a decent wage before that happens. And any work you undertake becomes a better resume entry than a long gap.
More than anything else, you should love what you are going to do and be prepared for exploration, discovery, and, yes, failure.
If you are looking for an answer that includes the buffering of risk - don't think about working for a startup in the first place.
Does the underlying technology or product or service excite YOU,
Can YOU make a whole lot of money filling a need or want
Can you be a needed solution for someone who will pay big $$$ for it
If any of the answers to these questions is negative then DON'T DO IT
you will die trying!!!
Life is too short to be miserable and poor
ُُEvaluating any business depends on the :-
1.The turn over , How much is the work turn over yearly , figures can reflects the size of work , Plus the management in charge , then the team working under the management , So that"s why all companies has to announce its financial statements showing all figures sales , debts ,credits, products ready for sale , raw materials n so on .
2. Management in charge - usually different departments effects or plays the main role in any business .
3. Sales team -which usually gives big support .
4.customer service department too supports the company name in market.
Its not easy to do so but we can find out by different means or ways , Evaluating any company during the first three months of work ,,,,,,,, .Strong work environment , most of good companies are following the rules n particular system for all , even if you dont ask or you don"t know .
What type of company it is? A trendy one who is here today and could well be gone tomorrow or one that provides product or service that people need. I would do a great deal of research on the CEO of the company and the company itself before making any decision.
It is CASH the most critical success factor. To secure success, one should measure his potential success by assessing his periodic net cash cash inflow. I would recommend you go through the following process:
--Decide your products and marketing mix
--Take account of all business variables and market influencing factors
--Ascertain the availability of the team and resources that make business success doable
--Assess the shape of results and bottom line figure
--Sensitize the forecasted results
--Go ahead only when you're sure of the results
Ask to see their business plan, if they have one. If they do not have a plan, or are unwilling to share the plan with you, I would look elsewhere.
The company profile is the key, the product mix, the potential market, and the feasibility of making the venture viable. The numbers, the technological grades and the start up costs, all these should be evaluated.
The business plan will go a long way in evaluating any business. Check out such sections in the plan,
The market section-is there enough market for the products/service, the sizeof the market, is it a growing and at what rate and competition, conducting your swot analysis besides the managers-their qualifications, wealth of knowledge and experience and their tract record,
You need to talk with the startp team, look at the deal that they are giving you, and there potential to get funding from an Angel investor. You may have to try working with a couple of startups to get a better idea to set your evaluation criteria.
Can you be contributor to their ideas and development? Are you willing to sacrifice what you would make with an established company? Do you believe in their Mission and vision? Do you like the people at the startup? But most of all, if all other statements are true then you have to understand that there's no true time frame as to when this startup company will be successful. So if you are willing to stay the course then you may have something.
For genuine and Serious inquiry of any form of banking instrument (BG/SBLC/MTN/DLC/LC) Which can be engage in PPP Trading, Discounting, signature project(s) such as Aviation, Agriculture, Petroleum, Telecommunication,automobile, construction of Dams, Bridges, Real Estate and all kind of projects, we can deliver at affordable price to our customers in other to derive maximum utility.for lease and/or sale from a genuine and reliable source without broker chain / joker broker story or chauffer driven offer while having your required time frame in mind.
We will be glad to share our working procedures with you upon request to help us proceed towards closing deals effectively.
Contact : Mr. Mahendra Jain
Email :Draj dot bgbroker(at)gmail dot com
Skype ID: Jaindra dot bglease