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Working for a startup

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  • User profile image
    spivonious

    Has anyone here ever worked for a startup? Better money than I'm making now, but I like the security of my current job (company's been around for 50 years). Can anyone give any advice?

  • User profile image
    W3bbo

    I'm working for a startup, but it's actually my own, so I earn absolutely nothing (I still live off the allowance I get from my parents  Blushing ) but I don't believe I'll ever get this chance again in life, so hey.

    I'm surprised that a position at a start-up would offer a higher salary than your existing job, given that working at a start-up is typically a trade-off of salary against the possibility of company shares that should balloon in value over time as the company grows.

    However, simply describing the company as "start-up" isn't enough to know whether or not to work for this. Consider a start-up setup by a recent MBA grad who is attempting to copy some other rival start-up (founded by a CS grad): one of those I might willingly work for, the other I'd stay well-away from. How successful do you see this new company being, and where do you see it in 5 years time? (A large independent company, or a subsidary of a larger one after it was bought-out)?

  • User profile image
    davewill

    Your already 1/2 way there.  Your thinking bigger picture which means your able to weigh risk versus reward more accurately.

    Having joined a 5 man company right out of college and growing (500%) with it for a decade and then seeing the tech bubble bursting take it down matured my perspective.

    Study the sandbox:

    I'd highly recommend getting intimate with the market that the company serves and the competition in that market.  You want to make a determination on where you think the market will be 5 years from now.  As the market goes the company goes.  You also want to take into account how the startup in financed.

    Study the ship's captains:

    You will want to get as good a feel as possible for the owners of the company.  If you sense a clash of personalities it is sure to be a bad long term sign.  The reverse is also a good sign.

  • User profile image
    spivonious

    The higher salary is also due to a change in location (Baltimore versus my current southern PA location). It's TidalTV, who, from what I can gather, recently did a reboot to get out of the internet TV market and into the video advertising market. They have raised a decent amount of capital ($61M), but since the online advertising market is very crowded, I'm not sure they really have a chance. From what I can gather on the web, the company has about 20-30 employees, but they seem to be mostly on the executive and sales side of things.

    I haven't had an interview yet, so this may all be for nothing, but the salary is 55% higher than my current job. Cost of living would also go up, but only by about 33%, so it would still be a net gain for my family.

    My wife is concerned about the quality of the Baltimore school system (we're planning on having kids within a year), and I'm concerned about the job security. If this company goes belly up a year after I join, where am I then? Of course, we'd also have to sell our house here, buy a house closer to Baltimore, etc.

  • User profile image
    ryanb

    Sounds like you already know your answer.  From your description, I wouldn't go anywhere near that startup.

     

  • User profile image
    IsThisReally​Beer

    FBI releases 2009 crime stats; Baltimore No. 5 for murder rate

    http://weblogs.baltimoresun.com/news/crime/blog/2010/05/fbi_releases_2009_crime_stats.html

    City                  Population       Murders        Rate

    New Orleans      336,425           174             51.7

    Richmond, Calif 102,566           47               45.8

    St. Louis             355,208           143             40.3

    Detroit                908,441           361             39.7

    Baltimore          638,755           238             37.3

    http://www.travelandleisure.com/articles/americas-dirtiest-cities/7

    No. 6 Baltimore

    The Inner Harbor is a crowd-pleaser, but AFC voters weren't impressed by Charm City's overall cleanliness or its more land-based features. Baltimore came in next-to-last place for its public parks, hotels, and even interesting people.

    http://www.crunchbase.com/company/tidaltv

    They're on their series C round and have a brand literally no one has heard of. Their series A round should have given them enough runway capital to move to California and do some marketing.

    Look at their VCs:

    New Enterprise Associates
    Valhalla Partners
    Comcast Interactive Capital

    They're all very small players in the IT equity markets and Comcast could just as easily pull out and shut the whole thing down like they did with TechTV.

    So they stashed their runway capital instead of branching out. You have to ask yourself why.

    If you do take the job, get a .5-1% position in the company. That may piss them off, but make that a condition. When they divest and elements of the company goes up on eBay, you will get something to compensate you for the lack of 401k contributions and the fact that you couldn't get new glasses for free for 1-2 years because of no zero deductible vision/dental/group plans.

    Generally startup companies suck to work at, but to compensate you they give you preferred stock which you must vest before selling. Make sure you get enough so that when they exit in failure, you can recoupe. There's no way they're going to make it all the way through the pipe line.

  • User profile image
    spivonious

    @IsThisReallyBeer: Yeah, they were #1 for murders about 10 years ago. The headquarters of the company is on the Inner Harbor, and it's a nice area. I wouldn't live in the city but there are affordable houses in nice-looking neighborhoods in the near suburbs (30 minute drive).

    I think I'll tell the recruiter I'm passing on it.

  • User profile image
    IsThisReally​Beer

    Oh man, you were solicited by a head hunter too?

    bad news....

    Most of the time startups hire people through recommendations and word of mouth, outsiders usually don't get decent equity cuts. Or worse they are considered temp even though they were hired full time, ie expendable.

    Beware people contacting you anonymously on Linkedin.

  • User profile image
    spivonious

    It was a posting on LinkedIn that I responded to, not a message to me personally.

  • User profile image
    IsThisReally​Beer

    @spivonious:

    I see. Even taking that into consideration, many of the jobs on linkedin are posted by recruiters instead of the actual employers.

    What these people do is target start-up companies then present them people they have never met for a 5-10% salary cut on their first 6 months or year of work.

    All it costs them is an ad or a phone call, and they will take up to 20k of your salary.

    They know start-ups are vulnerable and don't have HR departments so they take advantage of that. Most of them are having an especially good time in this weak jobs economy.

    Instead, check Craigslist SF or Craigslist LA and consider relocating to California if you want to make a 6 figure income as a programmer. There are plenty of "real" companies here that will hire you if you have experience and skills.

    If you absolutely want to work at a start-up company, consider that start-ups that move out here have very good runway funding and are usually in a good pipeline that will lead them to at least an acquisition.

  • User profile image
    IsThisReally​Beer

    One more thing.

    "received $15M in Series A funding. (2/26/08) "


    TidalTV received it's first round of funding in February 2008. That's about 3 1/2 years ago.

    Absolutely beware of companies that have been in business for over 2 years that refer to themselves as start-up companies. A start-up company means you've been in business for 2 years or less.

    If a company in a middle stage is still referring to themselves as a start-up company it's because they feel they still need that handicap title, which means they are total losers. All the city/state/federal start-up exemptions end at 24 months flat. Generally if you don't make it by then you close up shop and reboot to get the exemptions again for another 2 years.


    Another thing that wasn't mentioned is that simply working at a start-up company that eventually IPOs doesn't mean you will get anything. Look at Monte Davidoff, who started at Microsoft in 1975 at the Albuquerque, New Mexico office. He should be a billionaire right now but he's not.

    As embarrassing as it may be you absolutely need to rape and pillage the existing founders for everything they'll give you and even stuff they won't. Otherwise they'll absolutely Bill Gates you.

  • User profile image
    figuerres

    wow ... in this i tend to agree with beer.

    stay clear, it's not a startup and sounds like there may be a number of issues inside.

  • User profile image
    davewill

    Agreed.  Something doesn't smell right.

  • User profile image
    vesuvius

    @figuerres: I concur, and wonder why the strange Case of Dr Jekyll and Mr Hyde keeps recurring. Sensible then nonsensical.

    Nevertherless, the only piece of advice I can add to this is remember that it is you that is in charge, working with agents, you always end up picking the card that they wanted you to choose. Until they know you, assume you will be given all the problem customers, after you know them for a while you will probably find that they could have given you work right where you are living at present.

    The system works a little different in the UK with nothing like Santa Clara. the good thing about moving there is that you are almost always guaranteed work, rather than relocating and finding that you need to relocate again in 6 months or a year.

  • User profile image
    Harlequin

    Make a note that most tech recruiters out there that are paid by companies to find people. Not all of them take "20k of your salary"...

  • User profile image
    W3bbo

    ,Harlequin wrote

    Make a note that most tech recruiters out there that are paid by companies to find people. Not all of them take "20k of your salary"...

    20k sounds about right if it's a high-paying job. Some recruiters I've spoken to wanted 14%.

  • User profile image
    spivonious

    @W3bbo: Wow, that's a high commission. I figured it was closer to 5% or even just a fixed fee per interviewee.

  • User profile image
    IsThisReally​Beer

    I wish it weren't true, but most recruiters are scumbags.

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