A startup is an entrepreneurial venture that is just beginning to develop. These, newly emerging companies offer an allure and excitement that well-established companies can't match. Job descriptions are generally added with tempting phrases like “casual, fun office environment” and “room for rapid growth.” which makes working for a start-up more enthralling and exciting. But another point to be emphasized is that a startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed in spite of initial quick success. There are risks and rewards to ponder when looking at any early-stage company. Thus, if you are on the fence or ready to give it your all, you are advised to do your research and make sure the organization you are going to work for has the best chances of survival.
Here we have assembled the top 11 essentials to be investigated about a startup before leaving your stable corporate IT job for that hot new startup.
1. Employer’s expectations:
Usually working with less resources available during its initial stage, a startup tends to efficiently utilise each of the available resources which often entails a varied set of responsibilities. So, before joining an early stage company, it’s important to know your job description and the key result areas. Things like job titles, desk assignments, and project plans are changed frequently. Thus, those who dislike ambiguity should stay away from startups. Even if you are willing to go beyond the stated KRAs feel free to speak to the founders, especially the CEO to discuss your role in the company. The one to one interaction would provide greater clarity on what the employer expects from you.
2. Founders’ background
Before you think to join a startup, do a background check on the founders. Pay special attention to their industry expertise, academic background, network, skills and experience, any awards they've won and many more. You need to check how much the founders have invested in the startup. These important things can be explored out either through direct interaction with the founders or through those already working in the company. You can also use Google to track down the leadership team. You also need to learn how the founders handle the situation when things go out of box. All these can help to attest their future success probability.
3. Funding resources
One of the most important things to consider when joining a Startup is the money. Where does the money come from? Either the startup is venture-backed and have millions in their bank account or is bootstrapped. It’s important to inquire about out the investors backing the startup to check whether the company provides financial assurance even during a bad phase. A startup backed by a strong, reliable set of investors is much more likely to succeed than one without it. Also, investors do a lot of research before putting in money in a venture. So, a startup having reputable sponsors backing it financially, it is likely to have sound growth prospects.
4. Working stage
Life is all about taking risks. There are few rewards in life that you can get without taking risks. If you want it, go for it but not blindly. It doesn’t mean you don’t do any calculations prior to taking a risk. Check out the phase the startup you’re considering to join is presently in. Joining an early-stage venture which doesn’t have a foothold in the market and is lacking the seed funding, can prove to be a gamble. On the other hand, if the Startup has gained initial traction for its product, with increasing number of customers, it might be a great time to jump in.
5. Exhausting long working hours
The founder, who is passionate about the his startup, is under great pressure to ship a product and start making money. When you are under such pressure and things are not moving as fast you want it to, the easiest solution is to work longer hours. In other words, startups are typically fast-paced work environments where employees are encouraged to work as much as possible. It’s how working for a Startup is going to be, a roller coaster ride. Thus, those who are all about work-life balance might find this aspect troubling.
6. Potential Success of the Product or Service
Get an idea of the market the startup’s product or service is in. Check if this market is crowded. Is the company directly competing with other organizations already existing in the market? What business issue is the company attempting to solve? Without customers or markets for what you’re starting up, the company won’t be able to survive for long.
7. Startup exits
Find out the top management exits. There are several cases where even the founder has left which is a bad news for prospective employees. People join a startup with the expectation of growing with the company. Exits are often a result of a dispute in the top management. Turf conflicts between founders and investors can upset the whole operation exposing the startup’s and its employees’ futures to risk. Thus, before joining a startup, you must find out about exits from the company, especially that of board members and top management in the past 1-2 years.
All above points are very important before you join a startup in an anticipation to earn more bucks and secure a prestigious designation. But at the same time remember that any amount of due diligence on your part won’t guarantee a startup’s success. All you will get at the end is the diversified experience and make new contacts in the industry, which will help lead you to additional opportunities.