In our “Advisers Answer” series, we pose a single question to the founders, investors and start-up experts who serve on the Founders Workbench Advisory Board.
This month, we asked:
“What are the Key Factors Someone Starting Out Should Consider When Deciding Whether to Join a Start-up?”
Here is what our Advisers had to say:
Jerry King - Chair of The Capital Network
One important thing to understand is that start-ups by their nature are risky businesses. Everyone wants to be part of the next Facebook. However, a lot of hard work and uncertainty comes along with such an experience. If you are risk adverse and have a hard time adapting to change, then a start-up is not for you. If the idea of building something cool and meaningful gives you satisfaction - and you can get comfortable with the risks - then jump into the deep end of the pool and start swimming!
Frederic Kerrest – COO and Co-founder at Okta, Inc.
The first question is what's your appetite for risk? If the answer is not a ton, then don't join any startup with less than $20-30-40M in repeatable sales and on a steep acceleration curve. If the answer is at least a little risk, after market, team and product a number of personal factors come into play. Those vectors are different for each individual.
Start with your 3 year personal goals. What does success look like? Be realistic but aggressive. What are you passionate about: curing cancer, more efficient water management or enterprise software like me? Target specific companies and reach out to execs directly at those companies with a targeted message in three bullets or less (readable on an iPhone in under 30 seconds) and a link to your resume in Dropbox: why me, why me now, call to action i.e. can we talk for ten minutes at your convenience because I am passionate about what you're doing and can solve these three problems for you tomorrow. Remember, busy people are just that - busy - so make it easy for them to decide that they should take time out of their busy schedules to speak with you.
Oh, and if you can't figure out the execs' email address (Internet, LinkedIn, etc.) or better yet get a warm intro to them from someone in your network, then don't leave your Large Company job because networking and scrappiness are not optional for success in the startup world.
Sean Glass – Venture Partner at Novak Biddle Venture Partners
- It's risky
- You probably won't make the millions you think you will
- Do you actually care about the problem the company is trying to solve?
Lizette Pérez-Deisboeck – General Counsel at Battery Ventures
Your team is key. You¹ll be relying on their judgment to build the rest of the team, raise financing, set product/market strategy and guide overall direction. You want a team who has vision, passion and, ideally, a good track record building successful businesses. From a very practical perspective, you also need to consider whether you can afford it. Not every start up goes from rags to riches instantly and you may need to stick it out for a while until your salary goes up and you have liquidity for your equity. If you have loans and other financial obligations, you need to be realistic about your near-term financial prospects.
Nithya Das - Acting General Counsel at AppNexus
Candidates are sometimes inclined to focus on factors like a company's latest valuation when deciding whether to join a startup or not. That's telling but it shouldn't be the deciding or most important factor. Instead, a candidate should evaluate the company's potential for growth and the team. When I was joining AppNexus, I considered the caliber of the management team and the VCs who had invested as well as the amount of potential growth in the space in which the company operates. I also tried to get a sense of the company's culture, how the team made business and strategic decisions and the 3-5 year outlook for the company.