Questions to ask before you join a startup

At the beginning of 2018, I got my first full-time job as an Autonomy Software Engineer at a startup in San Francisco. They were working on ‘disrupting’ urban mobility by developing autonomous eVTOL taxis to be used for an air shuttle service. I had recently decided against pursuing a Ph.D. since I was eager to solve real-world problems and get out of the university bubble. I decided to join a startup since I wanted to optimize for growth early in my career. However, none of my education until now had prepared me well for how to evaluate different startups. This document ignores role-specific questions since they’re usually highly context-dependent and I assume you’ll already be asking the team about them.

If I were job hunting, these are the questions I’d be interested in asking – it’s skewed towards:

1. startup/early growth tech companies,
2. engineers, and
3. interviews with founders/hiring managers.

Basics

Before accepting an offer at a tech startup, you must be clear about what you want from a new job. If you want to work in tech and you’re optimizing for making a bank, startups may not be the best option. If it is, you should consider working for tech giants like Amazon, Microsoft, Facebook, Google, etc. However, for many working at a startup will always be preferable to working at a big corporation. Some people have an appetite for the risk-to-reward ratio, the plethora of roles you contribute to, having ownership over different systems, and so on. However, ensuring you’ve got what you need to lead a comfortable life and pay your bills on time is critical. Don’t take a job that doesn’t cover your cost of living or does not provide health insurance. Before accepting a job offer, you need to research the average living expenses of the city you’re moving to. A good rule of thumb is that 25% of take-home salary should go towards housing, which may go up to 40% in SF/NY.

If the job requires relocation, it is common for companies to cover your relocation expenses. This relocation usually varies from $3,000−$10,000.

• What’s your base compensation package?
• What health insurance options does the company offer?
• Does this insurance cover any dependents?
• Does the company also offer vision and dental insurance?
• Does the company offer relocation (if needed)?
• Does the company offer a signing bonus?

Equity

Startup equity is a complicated topic worthy of a separate blog post, but for the sake of brevity, I’ll keep this simple – you need to know that equity in this startup has a chance of producing a nice windfall for you.

The questions in this section should only be asked after you’ve received an offer. Ask these three questions to establish whether or not equity is valuable at this startup:

• What percent of the company do these shares represent? Your percentage of ownership means more than your number of shares.
• What is your total preference stack? The more owed in liquidation preference, the less your equity is likely worth.
• What’s the minimum price you would exit for? Their answer gives you a reference point for valuing your potential payout.

If the startup offers you a good percentage of the company, doesn’t have an astronomical preference stack, and would like to exit at a reasonably high price (or IPO), your equity is in good shape. However, your equity will most likely not help you with an early retirement unless you are getting hired as the founding engineer and the company exits >$1Bn. So, given an option between higher equity and higher base compensation, always choose higher base compensation.

Company Financials

If you plan to join a startup, you’ve every right to know how the startup is doing financially. Let’s start with the fundamentals. You should research the total funding the company has received to date. This information lets you answer the question: Are they default alive?

After learning about the basic financials, you need to find out about the investors in the company. The investors, some of whom would also sit on the board, can have a profound impact on the company’s culture and the direction of the company. Tools like AngelList and Crunchbase provide information about previous investments. Individual investors can usually be found on LinkedIn.

• What is the total amount of funding raised?
• How much cash is on hand?
• What is the monthly burn rate?
• What round of funding has the company raised?
• Who has invested in the company?
• When is the company planning on fundraising next?

Growth and Responsibilities

One of the major perks of working at startups is that the projects are high-impact, and you can own large pieces of the stack. There’s not much room to waste time or work on things that are unimportant to the business. Working at a startup is one of the most rewarding things you can do for your career because the breakneck pace forces you to learn on the fly and grow fast. Constantly learning will be critical to getting things done, even if you’re an expert.

However, you must ensure the prospective projects are exciting and will take your career in the desired direction. If you’re unsure about your long-term career goals, choose a position that will expose you to many different roles, and you may discover your calling. It is not uncommon for someone to find something they love doing and become the person who owns a set of problems or services related to that thing.

After gaining insight into the company’s engineering direction, you must ask who you’ll be working with. Hopefully, you would have already met a few of your potential teammates during the interview process. If the company doesn’t do this, you can usually ask to meet with them, especially if they extend you an offer. Consider it a red flag if they won’t let you speak to a potential co-worker. You’ll spend hours every day with these people under super stressful situations; make sure these are people you get along with. If you get a bad feeling about a team, trust your gut here; there are many other startups!

• What’s the on-call plan/schedule? (what’s the pay for standby and call-out)
• What are the tasks I would do on a usual day?
• Are there any specific goals for me?
• What’s the junior/senior balance of the team? (and are there plans to change it)
• What does the onboarding look like?
• How much freedom for decision-making do individual developers have?
• What are the expected/core work hours?
• What is your definition of success for this role?
• What do you expect me to accomplish in the first month, three months, and six months?
• How will you evaluate my performance at the end of the trial period?
• What does a typical day/week look like in this role?
• What’s the promotion process? How are requirements/expectations communicated?
• Is there a separate tech and management career path?

The Culture

Working at a startup where the culture fits with your values can be highly rewarding. Therefore, evaluating a company’s culture and understanding whether you’d fit in or not is very important. A startup with a strong culture will have values that go deeper than buzzwords, foosball tables, and after-work happy hours. So, it’s crucial to know what the core values of the startup are. It’s one thing to have an extensive values document and an entirely different thing to actively use it to resolve conflicts, define processes, and make decisions. Try to get a sense of how these values are reflected in everyday processes and decision-making. Finally, ask about how many people recently left the company and for what reasons. If possible, reach out to these people via LinkedIn and try to interview them about their experience working at the startup you’re vetting.

Some of the questions I ask when trying to vet the company culture are:

• How is the work organized?
• How does intra/inter-team communication typically work?
• Do you use any tools for project organization? What is your experience with them?
• How are differences of opinions resolved?
• Who sets the priorities/schedule?
• What happens after pushback? (“this can’t be done in the projected time”)
• What happens when the team misses a release target?
• What kind of meetings happen every week?
• Would there be regular 1-on-1s with my manager?
• What’s the product/service schedule? (n-weekly releases, continuous deployment, multiple release streams, etc.)
• What happens after production incidents? Is there a culture of blameless analysis?
• What are some ongoing challenges the team is experiencing that you are yet to resolve?
• How do you track progress?

Remote Work

After the 2020 pandemic, a lot of startups went completely remote or switched to a hybrid culture. If your potential role offers the flexibility to be remote a few days a week, you may want to ask some of the following questions:

• What’s the ratio of remote to office workers?
• Are extra accessories/furniture possible to buy through the company? Is there a budget for them?
• Is there a budget for co-working space or internet access?
• How often is one expected to be in the office?
• Are the office meeting rooms always prepared for video conferences?

Conclusion

Joining an early stage startup should be a commitment of several years, often in the prime of your career. Therefore, you must decide with utmost care; it’s very different from taking a job at a large company with a high salary and a nice benefits program. The work will be long, challenging, and hopefully the most rewarding of your career. The questions highlighted in this post shouldn’t take more than 15 minutes to cover. You owe it to yourself to go through the diligence before committing some of the most productive years of your life to a startup. Finally, trust your gut. If something feels off during the interview, it probably is. Just because they raised a gigantic round and got a TechCrunch article doesn’t mean they have their shit together. There are thousands of startups to choose from and like all things in life, going an extra mile to find the right one is worth the effort.