
Questions to Ask Before Joining a Startup - hharnisch
https://hharnisc.github.io/2018/11/25/twenty-questions-to-ask-before-joining-a-startup.html
======
latch
I've been thinking about low-friction options for getting a sense of the
engineering quality. I don't think I'm alone in thinking that technical debt
and bad software development practices are a top concern.

Being quite senior now, I'd feel comfortable asking:

1 - To see their CI dashboard

2 - To see a sample of their production systems stdout & stderr

3 - Asking to review a recent non-trivial commit (with the person/people who
wrote it)

4 - If you're interviewing remotely for an on-site position, finding out if
they have an open office

5 - Finding out how they do deploys / devops

~~~
Waterluvian
In the context of a startup, I would expect almost all of those to be
disappointing. But maybe that's what you're hoping to see.

In my opinion, if you're a start-up and you've got all those boxes checked,
you're possibly doing the right things in the wrong order, and that's a red
flag for me. What I hope to hear are responses like, "so this is how we're
doing CI. It's awful, almost non-existent. But that's because at our scale it
just wasn't important. But as we grow it will become VERY important, so here's
what we're thinking about doing in the next 6-12 months..."

I've experienced a start-up with lots of tooling and process , none of which
matters when you take forever to ship (and stay shipped).

~~~
owens99
This.

As I always say, "If you are building a startup, over-engineering is a far
bigger sin than creating technical debt."

~~~
ryanSrich
But having CI, proper logging, and code review isn’t over engineering. The
time, effort and bugs saved by spending 1-2 days putting these policies and
procedures in place is valuable early on.

Of course, each of those pieces is at risk of becoming over engineered. But
hopefully the team has a leader that knows when to move forward and when to
pull back.

~~~
mcv
Particularly CI. If you want to be able to release fast and often, having that
automated is going to save you a lot of time.

And CI doesn't immediately have to include everything you'll eventually want;
just having automated build and deploy will make your life a lot easier. Add
some automated testing as soon as you can afford to (which hopefully is right
away, because it's not that hard to set up), and you're ready to move.

------
jasode
_> It is also important to note that early employees experience more dilution
events. An example of a dilution event would be raising another round of
funding. This is another reason why joining a company early should offer more
equity._

I disagree that it's important to note that early employees experience more
dilution events. I know you're trying to educate but this type of advice
unintentionally _misinforms_ people and causes people to pay attention to the
wrong thing. Ultimately, the more important math is _number_of_shares
multiplied by share_price_. As long as that goes up, dilution is not as
important. What employees will care about is whether the _total money wealth
went up_ and not whether their 5% ownership turned into 4% because a new
investment round bought 20% of the company. I have no idea why dilution
attracts so much verbiage that's out of proportion to its mathematical
importance.

~~~
PacifyFish
I disagree. The most common way to predict payout is to compare to other
companies' exit valuations.

E.g. "Oh, company X got acquired for $250 million. We do something similar. If
I own .025% of the company, I'd make $62,500 if we exited at that valuation.
Cool."

It's important to be aware of dilution events so that you realize when you
accept the offer that your .025% will be more like .008% if you're lucky
enough to have a successful exit.

~~~
jasode
_> It's important to be aware of dilution events so that you realize when you
accept the offer that your .025% will be more like .008% _

But you're repeating the same error of prioritizing the wrong thing: dilution.

What employees ultimately care about is their wealth calculation:
_shares_multiplied_by_price_.

Example of the type of math people actually care about:

    
    
      0.008% (because dilutions) a $1 billion company is $80k
      0.025% (no dilution) of a $100 million company is $25k.
    

People would rather have $80k than $25k. The dilutions that dropped them from
0.025% to 0.008% is irrelevant trivia.

For most employees that are minority shareholders, dilution is a _side-effect_
calculation in the realm of academic trivia. Dilution is not a purposeful
strategy in this situation. Highlighting "dilution" in advice for employees in
an attempt to make them more financially more sophisticated has the opposite
effect!

The scenarios for dilution to be a calculated strategy would be something like
a founder considering 2 different offers from potential investors. One VC
offers $20 million for 15% of the company. Another offers $30 million for 25%
of the company. Or some founders selling too much of a percentage such that
the dilution crosses some boundary such as 51% ownership where they
collectively lose control of the company. These deliberate decisions around
dilution are very different from employees realistically worrying about
dilution dropping them from 0.025% to 0.008%!

~~~
nlh
You’re entirely (technically) correct. The issue is that side-effect often
comes into play because employees like to calculate potential future outcomes,
and that’s done based only on overall company value (since that’s one of the
only data points that’s available from past acquisitions).

I’m sure you get this and I know the psychology of what an employee might hope
for shouldn’t be relevant, but unfortunately it is.

(For those who don’t fully get this - what I mean is that folks often look at
a potential outcome and say “other companies like this have been acquired for
$1-2B vs $100B, so if I’m being given 1% at $10M my stake could be worth
$10M!” When in reality after dilution, that stake might only be worth $2M,
which is a very different outcome after 5-10 years of hard work at below
market salaries.)

~~~
tdumitrescu
Another aspect of this is that if you join an early stage startup and work
there 5-10 years without any new equity grants (such as the annual refreshers
that many companies give) while the company grows and does new funding rounds,
then you're getting screwed badly.

~~~
jiveturkey
only financially, which isn't one of the reasons you should work for a
startup!

~~~
kakaorka
I think getting paid (preferably well) is always one of the reasons why people
work for _any_ company, including startups.

------
OliverJones
This is good stuff.

I want to emphasize one point. A company may offer you options, or restricted
stock units, or any sort of equity in the company.

When they do this, they are asking you to invest in the company. They are
asking you to buy your shares with your scarcest resource: time.

Do NOT be the slightest bit embarrassed to ask any question you want about the
company's capital situation, funding prospects, premoney valuation at the last
funding round, amount of "runway" left before they need revenue or another
round of funding, names of major shareholders, preferred shares outstanding,
etc.

Warren Buffett would ask lots of questions if they asked him to invest; so
should you. Mr. Buffett probably would ask better questions, but that's OK.
The company should encourage questions from YOU: they're asking YOU to invest.

If they bristle at your questions, it's a red flag. They may say, "look,
that's confidential, can't answer specifically," and that's OK. But they
shouldn't get annoyed.

And, remember, you can't pay your rent or buy groceries with unvested options.
You need cash money for that.

~~~
jiveturkey
> And, remember, you can't pay your rent or buy groceries with unvested
> options. You need cash money for that.

You can't pay your rent or buy groceries with vested options either.

~~~
walshemj
You can leverage it in salary negations i.e. I have options on xxxx £1 shares
of a private company which would only sell out at say 30x 40x.

Then again the UK is saner when it comes to employee shares - and I am lucky
that I have EMI options - which are taxed at 10% CGT and 0 income tax.

------
gesman
Option piece is misleading.

You own 1% of options and company is bought for $10m.

Your payoff?

Likely $0.

He forgot to mention preferred shares given to VC’s with liquidation
preferences that likely never disclosed to new engineers.

This is what makes new engineer to sacrifice his salary for a possible
liquidation even that likely either never happens or there is no money left
for him after VCs took their xN ratios off the payoff.

~~~
jpmoyn
Can you elaborate on why your payoff is $0 if you have 1% vested common stock
in the company?

~~~
i_am_nomad
Liquidation preferences mean that some shares have rights that others don't.
In a liquidity event (IPO or acquisition), the people holding the "preferred"
shares get paid out first, according to the number of shares and the valuation
of those shares. If all the cash and other assets from the acquisition are
given out to them, then anyone else holding the less-preferred shares get
nothing.

Usually, the founders and VC have the preferred shares, while someone writing
unit tests at 3am does not.

~~~
deathanatos
Are "liquidation preference" shares just tagged as being worth more than their
actual value though? I can't reconcile how they could get paid "according to
the number of shares and the valuation of those shares" _and_ have there be
nothing left over for the non-preferred stock. If the founders/VCs have any n%
of a, say, $10M acquisition, that still has to leave money for everyone else,
unless the total number of shares is >100%, someone has a funny idea of a $10M
company being worth more than the $10M that was paid for it, or there is
something else going on.

My understanding is that you're perfectly correct, however — I'm just trying
to demonstrate how I don't really "get" it. I presume there's some other
number involved in the "liquidation preference" that is visible to those
involved that make it more than a mere n% of company calculation.

Edit: Googling this, it seems like these special investors get to recoup their
investment if the company is selling for less than what they valued it at at
their time of investment. (And since it seems like this generally applies to
VC firms, I gotta say, this is really lame. It was a bad investment, but you
know the actual employees took a lot more risk in it, and yet the _VCs_ get a
better return — albeit a loss.)

~~~
Spoom
If you have preferred shares, you often have a "2X liquidation preference"[1]
or other multiple. This means that you are guaranteed to get _at least_ two
times your initial investment in a liquidation event, _even if_ the value of
your shares at the time is less than that amount.

This can (and often does) eat into the common stockholders' (e.g. employees)
liquidation amounts.

1\. [https://www.businessinsider.com/how-liquidation-
preferences-...](https://www.businessinsider.com/how-liquidation-preferences-
work-2014-3)

~~~
pge
In my experience (~ 20 years at institutional VC funds), 2x preference (or
anything above 1x) is extremely rare. It comes up only when there is a
distressed situation, and the investors do not believe that they will receive
any money beyond their liquidation preference (i.e. other junior liquidation
preferences will consume the rest of the proceeds from the sale of the
company).

~~~
PeterFBell
I saw it around the dot-com days along with a lot of other extremely dubious
terms for extremely desperate founders - at least in NYC.

Agreed that more than a 1x liquidation preference these days would generally
be surprising, but in a low end scenario or with a few big rounds, all it
takes is a 1x to wipe out any upside for founders and employees, but if you're
deemed worth it, the acquiring company can offer you a worthwhile incentive to
stick around.

------
seibelj
The only valid reasons for working at a seed-stage / series A startup:

You are a founder.

They are working with a technology or in an industry that you specifically
want to work with and it is very hard to work on it professionally, and doing
side projects are infeasible.

You need experience and you have no other option to get experience.

You are getting a significant title bump that moves your career forwards.

Invalid reasons for working at a startup:

Equity (getting rich off stock options) - this is very likely to be worthless
unless you are a co-founder.

Salary - you would make (much) more at a big company.

Work life balance - you will work harder than you ever have.

Stability - does not exist.

Benefits - very bad.

Learning - they will not have any formal training nor time to train you, so be
prepared to self-learn.

\---

All that said, I enjoyed my time as an employee at multiple startups. Just go
in for the right reasons and your eyes wide open.

~~~
weka
> You need experience and you have no other option to get experience.

This was me and I paid for it. Right now I'm on week 8 of 30 hour weeks. It
sucks.

~~~
aw1621107
I thought standard work weeks were 40 hours (at least in the US)? Are your
work weeks normally shorter?

~~~
jimmy1
40 hours is the target. In practice, most salaried employees work around 50-60
hours a week -- more if you count checking and responding to email after work
/ pager duty / etc

~~~
chipotle_coyote
While I'm aware some would call this a rather contrarian opinion, I truly
believe that if you're in a salaried position and routinely _required_ to work
45 or more hours a week, whether by actual mandate or "but that's just what we
all do here" cultural pressure, there is something wrong with that company,
more than likely starting at the top. Many companies have extraordinary crunch
periods for one reason or another, and that's fine, but if you're in a crunch
period more often than you aren't, that's no longer extraordinary.

------
pcpcpc
I'd also ask questions to get a sense of the "soft skills" of the founders or
whoever will be managing you. It's a truism, but "people quit managers, not
companies."

There are tons of resources online for questions to ask, and I think the
company/viability questions from the post are good, but I would add to them
some of these types of questions:

How you will be managed/evaluated and the mission of the company:
[https://www.themuse.com/advice/8-questions-most-people-
dont-...](https://www.themuse.com/advice/8-questions-most-people-dont-ask-
hiring-managersbut-you-should)

How your founder/manager will navigate conflict, which is inevitable:
[https://www.thebalancecareers.com/interview-questions-to-
ass...](https://www.thebalancecareers.com/interview-questions-to-assess-
conflict-resolution-skills-1918500)

------
geophile
Major omission: Does the business model make sense to you?

More specifically: Is there a demand for the product? Are there competitors?
If not, why not -- are you sure the product is actually something that
somebody wants? If there are competitors -- how will your startup compete with
them? Do you trust the people running the company to guide it to success,
either directly, or because they have plans to hire people who can? Is the
technology feasible, or are the founders embarking on an R&D project?

There are no guarantees of course, and you can learn a lot and have fun at a
startup that fails, but do your best to join with your eyes wide open.

~~~
eli
Agreed, but this is sometimes very hard for a candidate to assess if they
themselves are nowhere near the target customer.

Asking about competitors is a great question though.

------
rangersanger
Major Omission: People

Ask yourself-

Do I trust the founders?

Can I have healthy debate with the founders?

Will my feedback be considered by the founders?

Am I compatible with the founders?

Are the founders compatible with each other and are they able to work together
constructively?

~~~
dabockster
Bouncing off this comment with an example from the last job I worked at (a
startup).

> Do I trust the founders?

At first, I did because I was too green about small businesses. I thought the
worst they could do was pay me lower wages. Oh, boy, was I wrong. Not only did
I get 1099'd, but also had my hours and wages cut two months in. (The 1099 was
resolved, though, thanks to the IRS's contest process.)

> Can I have healthy debate with the founders?

I found out after joining that the founders were married. So no to this one.

> Will my feedback be considered by the founders?

It was, but then promptly discarded since the founders lied about their
technical skills (they knew enough to sell tech but not to build it). So
everything was a game of "why can't you just drag/drop this X thing like we
can in Photoshop".

> Am I compatible with the founders?

One of the founders sold me on the fact that he played guitar. But then I
found out that they blasted the office with very light AM classical music for
the whole day. So nope, not compatible.

> Are the founders compatible with each other?

They were married, so no.

> Are they able to work together constructively?

See the above comment.

\------

Anyways, my experience is only anecdotal. But yeah, really dive into the
founder's dynamics to see if you can tolerate them or not before accepting a
job.

------
throwaway4000
Having worked at several start-ups, I'd say the employment risks are not worth
the cost. In most of my cases, when the start-up hasn't raised enough money,
you end up with a poor work environment - pissed off/stressed bosses, weird
work hours, "do anything" to save the business mentality... Generally
layoffs/firings occur pretty abruptly and you're left filing for unemployment
without a "thank you". My advice would be to wait for a start-up to be
"derisked" / 3-5 years old with a solid run rate above $100m in revenue.

The few success stories, such as Airbnb and Facebook, are the extreme
exception.

~~~
jiveturkey
I think a willingness to take on the risk is assumed by the author. Once
you've made that choice, then how do you evaluate one startup vs another. (as
an employee)

~~~
throwaway4000
i think we'll look back a decade from now and realize 90% of the start-ups
from 2008 to present were small businesses in disguise with MUCH MUCH smaller
markets than forecasted by founders.

i think hopping to a startup and back to a big tech company is fine. i've done
it for career advancements, but it was grueling.

------
bargl
Get. It. In. Writing.

I will say this much. People have bad memories. That includes you. You think
you remember that conversation perfectly? You probably don't.

Get. It. In. Writing. And don't trust anyone who won't commit to writing.

~~~
dabockster
And make sure you are present when everything is sent to the copier. If the
boss tells you that he/she needs you to sign two copies, don't do it. The copy
you receive could be a totally different document than what you signed for the
company. If the boss insists on making a copy at home, don't sign anything
either. Offer to meet at a Kinkos or something to copy stuff. You want to make
sure you're getting the same document out that you signed.

Or just go work for a more established company where you don't have to deal
with this stuff. Because, frankly, you're not ready for a startup if you don't
have the mental intuition to ask for everything in writing.

------
seige
The list of questions is great but I don't think there is a way to get to this
kind of information for the majority of candidates.

1) A startup with marginal success and showing growing signs can simply ignore
you and your questions and move to the next candidate. Startups where all
these ducks are in a row has a strong candidate pipeline and they simply move
on. You run the risk of standing out not as a diligent person, but as someone
who is meddling in issues beyond his/her means.

2) A startup willing to divulge all this and walk the extra distance for you
is probably too raw and desperately short of talent. When you get hold of all
of this information, you might feel this startup is not worth it, given you
now know where the skeletons are buried.

In the end, you really kind of have to wing it. Just like the VCs, the
founders and everyone else is at an early stage of an endeavor. It is a high
risk game, period.

My 2c is often towards ignoring all this math and doing your best to learn
more about the founders, their motivation and if they will take care of you.
Good founders always find a way to compensate you for your hard work whether
by financial means or by paying it forward in other ways.

------
maddening
I believe that equity is mostly SF thing.

One of my friends works in a startup in Berlin where he was offered equity as
one of the founders (10th engender or sth like that). Chances that he will be
able to liquidate them in foreseeable future is non existing.

Nobody else that I know was offered an equity, even though quite a lot of my
friends work for well funded startups. I worked in some and nobody offered me
anything else but a salary.

If I relocated near SF? Sure, there would be a possibility. If I was a
rockstar and one of first 5 cofounders? Also yes, but I am not famous.

I am really skeptical about any such post, as I saw myself that some
strategies that works in Silicon Valley do not work anywhere else and I am not
into moving to the most spoiled IT region in the world.

~~~
lazerwalker
FWIW, Germany specifically has complicated tax laws that make equity tricky.
Namely: if your equity ever increases in value — e.g. if your startup raises a
round of funding and gets a higher valuation — you owe capital gains taxes on
the increase, even if the equity itself isn't liquid (which it might very well
never be). There are workarounds, but they're a hassle. None of this is an
issue in the US, where you're only taxed when you sell.

I've never been an employee of a German company, but I'm in the process of
founding a startup here in Berlin. I totally get how saving early employees
from having to deal with that headache would be a blessing.

(In general, the advice in the article tracks with my experience working not
just with SF-based startups but companies in other top-tier tech cities like
London and NYC. If you get a job at a startup in SF, you'll absolutely get
equity as meaningful part of your job offer, even if you actively don't want
it. A large part of startups' ability to hire depends on them being able to
convince you it's okay you're being paid literally less than half of what
Facebook pays because someday your 0.01-0.1% equity stake might be worth
something)

~~~
jiveturkey
> None of this is an issue in the US, where you're only taxed when you sell.

Nope. In the US, you may be taxed when you exercise, and will be taxed again
(against the new basis) when you sell. Whether or not you are taxed at
exercise is a very complicated matter.

Keep in mind, when you are granted stock options, you don't actually have any
equity. You have an /option/ to acquire equity. The taxable events are the
acquisition of that equity and the subsequent liquidation of it.

~~~
lazerwalker
You’re totally right about options. I was thinking more explicitly about stock
itself (e.g. RSUs in the case of employees at companies that issue those
instead of options, or founder's stock in my personal case).

Separate from that, things are still more fraught in Germany: whatever your US
taxation situation is, I'm not aware of any situation where a valuation change
in stock/options/etc you're holding will trigger a taxable event for you, as I
understand to be the case with Germany. As I understand equity taxation in the
US, you'll only ever be taxed when events happen that you yourself have
initiated (e.g. exercising options or selling stock).

------
seanhunter
I'd treat the specific questions here with a grain of salt but directionally
the emphasis on making sure you inform yourself about the things you care
about is good. I wouldn't expect that asking questions of the prospective
employer is the best way to inform yourself about a lot of things though. A
lot of devs for example could use some advice about options, how they work and
what the tax consequences are when you receive or exercise options. Your
prospective employer really can't give you this advice in any credible way -
you need to seek it out independently and do your own research.

Some of the specific questions are not great depending on cultural context.
For example if someone joining my dev team asked me to pay to ship their car
somewhere I'd ask them why they needed a car to code. But I'm in London, where
having a car has marginal/negative utility versus being essential in other
places.

On the equity side, if someone asked these questions I'd know they don't
understand equity. What would really help is to see the cap table so you get
liquidation preferences etc but you're not going to get to see the cap table
most places if you're just going for a dev job. As it is, he says you might
not get told the strike price on your options, which in many/most countries
your employer would be legally obliged to tell you as it's part of the
valuation of your comp for tax purposes.

------
jbaczuk
A few comments from prior experience:

Equity in a startup is often used as a way to entice people to work without
having to pay them market rates. If you suspect this is the case, definitely
keep in mind that this equity could very well never be worth more than $0.

If you are interested in the value of the equity, then you have to be
interested in the value of the business. You must understand whether you think
the business value can grow. And this requires much more research and business
strategy evaluation than most jobs offers.

------
nnain
The power dynamic: You're seeking a job and mostly at a younger/lower power
position and might not be able to question the founder too much. It's the kind
of soft power that the #metoo movement has talked about. Unfortunately, there
are people who are ready to misuse that.

It's worse than when negotiating with a bigger company actually, cause there
you're just negotiating with HR department employees who would follow the law
more closely. At a large corp, you largely get what you expect.

Be very wary of what you're promised and told. I, unfortunately, was burnt by
this. I largely trusted everything that I was promised/told about the company
performance. But it was all hoax.

So an additional tip: Cross-check with your friends how they feel about the
company. Make this effort even if you are a bit introverted and don't like
discussing job offers etc with other people. Match what your research about
the startup tells you with what the founders told you about the company
performance. Look out for red flags.

~~~
alliecat
> Cross-check with your friends how they feel about the company.

This is very important. I have a friend who took a job at a Mysterious Fintech
Startup - he told our social circle in the pub and the entire table
collectively groaned and encouraged him to find something more stable (red
flags involved being paid pre-tax, etc).

They went bust a month later, a day after he decided jumped ship.

------
jph
Ask to see the pitch deck. A good startup will have a pitch deck that clearly
explains the plan, market, team, and more.

------
wjossey
I like this as a great starter list. When I joined my first startup 8 years
ago, I didn’t know to ask basically any of these questions. I just assumed I’d
work hard and get a Lamborghini some day (only half joking).

On the fundraising side, I’d add, “What is your fundraising steategy” when
talking to the founders. This massively changes potential value calculations
in terms of equity. I know some founders who are focused on not raising funds
and pure profitability, others who are focused on growth by any means. Part of
the calculus here is that by not shooting for more fundraising rounds, the
founders may be signaling that they won’t be selling anytime soon. In that
case, you should look to understand what your exercise rights are for your
options. Do you have to exercise within 90 days, or is there a grace period?

------
aarongray
More questions to ask before joining a startup: [https://www.aaron-
gray.com/questions-to-ask-at-a-startup-int...](https://www.aaron-
gray.com/questions-to-ask-at-a-startup-interview/)

------
wfwefwef32
I'm about to agree to join a startup, but reading all the comments made me
hesitate.

But I don't see a growth opportunity in a big company, the work is boring as
hell and there are engineers, who joined 5 years earlier than I did, are still
on same level as mine.

And the key engineering work is hold tightly by early members, unless they
retire, I don't see a chance.

And I want to do robotics. Although my current company is investing in the
area, they only need people with the right background, i.e. PhDs in robotics.
And I have talk with google recruiters, they let me choose a position before
the interview, but all my selections are as boring as my current position.

Doing a startup seems to be only way?

------
Ensorceled
These are mostly offer stage questions. If somebody asked most of these in the
opening interview I'd probably pass.

My most important preliminary questions are all trying to get to root of one
issue: Does this company follow a theory x vs theory y leadership model. So
many companies out there claiming to be team oriented but in actuality are top
down, my way or the highway operations.

~~~
jmharvey
The "Responsibilities" section is stuff I'd expect to ask/answer in an early
round interview. But yeah, the rest is all offer-stage stuff.

~~~
Ensorceled
Very weird that those were the last questions on the list...

------
arielm
> How does the company collect feedback from customers?

I’ve read quite a few of these guides and they mostly focus on equity/benefits
but I think product/market fit and feedback loops are a treasure trove for job
seekers because they can show you the future as well as how focused the
founder(s) are.

As a founder I’ve never been asked about feedback loops and rarely get asked
about product market fit. We’re not technically a startup anymore, so that
could be why. But I think those are useful questions for any company that
isn’t a household name like Facebook or Apple.

What you should be looking for in an answer is whether it sounds like the
company knows who it’s serving and is actively working to understand that
audience even better.

Regardless of valuation, rounds of VC, or the flavor of popsicles you can find
in the fridge, fit is what will ultimately get success. In my
opinion/experience.

P.S. - understanding everything else is also super important for _you_, but
this is important to understand to tell if there’s a future in which those
would be worth anything.

------
leroy_masochist
> A good rule of thumb is 25% of take home pay should go towards housing and
> up to 40% in the Bay Area. 40% can be done if you minimize costs like going
> out or have a second income.

This is an interesting, and perhaps telling, assertion. 40% can be done if you
minimize costs, not only in the Bay Area, but anywhere else. Thus, the
implicit point here is apparently that the opportunity set in the Bay Area is
so great that it's justifiable to allocate an additional 15% of pretax income
just to live there, relative to anywhere else on the planet.

I'm not sure if I buy that, especially within the context of taking a job that
you've already been offered that has a defined comp package vs. moving
somewhere to find a new job.

~~~
ummonk
As long as the other 60% in the Bay Area is greater than the 75% elsewhere,
you're better off in the Bay Area.

------
gist
I am not seeing that this document addresses the important concept of timing.
That is when to ask the questions. I am not certain that (as in any
negotiation) it pays to ask everything initially. It would be like going out
on a date with someone and hitting them with a list of questions prior to even
having the dessert. Timing is critical. For one thing depending on how well
they like a candidate they might be more likely to agree to something that
they initially say they can't do. Especially once they have invested enough
time.

There is no clear answer for the correct time other than to not assume it's
simply ok to state everything upfront (vs. time wasted on the part of the
applicant).

------
mygo
I think it’s important to note that in many situations, money > equity.

90% of startups fail.

If you have two options, one being getting payed your preferred rate, and
another being taking a huge pay cut for equity.. experience tells me to take
the money every time and you’ll have made the right choice 90% of the time.

For most people money on hand today is way more important than future money
that may never even materialize. And if you’re not most people, there will be
future opportunities to buy into the company one way or another if you want to
be an investor. You don’t even need to invest in the company you work for,
there might be better investments that your real money that you get from the
job can afford.

------
an4rchy
Awesome post. Definitely good timing as I was about to start an Ask HN around
this as I go through the process.

I've also asked about early exercise (83(b)) and term sheets, if there are bad
terms i.e. liquidation pref, anti-dilution etc but not all companies are
willing to share this info.

Also, I am curious about why companies don't just have a black box formula
output generator, with your equity offer value, saying this is our projection
and based on our current termsheet if the company exits at this value your
options are worth X, with the option of dilution built in.

------
aestetix
>> Technically there are 23 questions but I grouped the last one together as a
question for new potential teammates. Also 23 questions to ask before joining
a startup didn’t have as good a ring to it.

Actually, I'd argue 23 has a way better ring to it:
[https://en.wikipedia.org/wiki/23_enigma](https://en.wikipedia.org/wiki/23_enigma)

------
programjoe
This is great if the assumption is that the startup will be successful,
however given the failure rate it feels like the focus should be on risk
management. How much risk should I as a developer be willing to invest knowing
that statistically things might not work out.

Additionally, it would be great if there was material like this that was much
more approachable by someone early on in their career.

------
aey
With regard to equity, I wouldn’t join a startup unless it’s cheap for me to
buy the options. If you get your cliff, and it costs 50k to buy your options,
you are sol. You options are to throw away your equity, or be stuck at a
shitty job.

Whether it’s worth it “to get rich”, is kind of a bs argument. If the
opportunity exists to be a founder go for it, if not take the next best
possible option.

~~~
walshemj
So you can do the sell some stock to buy the rest thing Nil Paid I think its
called.

And tax wise it can work out better as you don't pay income tax of the shares
sold to buy the others - this is scenario dependant.

~~~
kevhsu
it's a startup. your stock is not liquid.

~~~
walshemj
You only do it when there is a liquidity event

------
jk563
I dunno how anyone else feels, but I'd add a 21 that's pretty important to me.
How is the startup planning on earning revenue?

~~~
jiveturkey
[https://www.youtube.com/watch?v=BzAdXyPYKQo](https://www.youtube.com/watch?v=BzAdXyPYKQo)

------
madrox
There are no engineering questions on this list, and the more I think about
it, the more correct I think that is. Unless you're stretching the definition
of a startup, most of what passes for current engineering is volatile and
subject to lots of change. Better to ask questions about the team and their
experience so you know what you'll need to build.

~~~
dabockster
I guess the only real valid question that you can ask in this situation is
"Does anyone here currently contribute to the code?". If the answer is yes,
start asking questions about the dev process. If the answer is no, then
they're trying to use you for a cheap "computer person" and you should move
on.

------
mavsman
I remember a similar list of questions being posted in the past that were for
any engineering position. Couldn't find the one I was looking for but this was
posted a while ago and seems pretty nice: [https://www.keyvalues.com/culture-
queries](https://www.keyvalues.com/culture-queries)

------
balibebas
Here's some advice. Don't feign passion. If you could give to shits about the
product wait for a better opportunity. Next. Your coworkers are competition.
Treat them as such. Next. Ask for at least 20% more than you'd settle for but
only after you receive an offer. Last. Don't become a JAP. You're welcome.

------
mbesto
Questions 4 through 14 are likely not to be answered, or founders will be
cagey about it. IMHO, if you get stiff-armed and you're applying to be in the
first 10 employees, then run.

My general view is if you're in the first 10 or so employees for a VC-backed
startup, you deserve near-founder benefits (including financial transparency).

------
pk455
I'm looking at joining a seed-stage startup straight out of college as #8.
What would be a good range for equity?

~~~
sarthakjain
0.25-0.5

~~~
billconan
how do you know the number? is there a table somewhere?

------
ken
It's not clear to me if these are intended to be startup-specific questions
only.

It asks "How does the company collect feedback from customers?", which sounds
like a pretty generic question, but there's nothing at all about working
conditions, which I'd consider a top priority at any job.

------
itronitron
+1 for finding out how much power individual board members have, although you
may have to dig into the history of the startup, press releases, and ask rank
and file staff members about recent events. The Board can easily kick out the
CEO and anyone they hired without much notification.

------
jiveturkey
> This could be a difficult choice for someone who doesn’t have much cash on
> hand.

This is a vast oversimplification. The entire section on equity is very, very
deficient and should just be disregarded.

This article is a fine start, but it still needs lots of work.

------
xivzgrev
Have you actually had a startup tell you how many options are out there?

I've joined a few different startups all series B or later, and have asked at
least 2 of them how many total shares there were. Neither would tell me.

~~~
jiveturkey
In 2018+, it doesn't make sense to accept an offer that includes options
without knowing how many are outstanding.

one late round "startup" i worked for, 300-ish employees and series F (just
before I started), but still very much a startup, actually gave very, very
detailed info in the option/RSU packet as part of my offer, without me having
to ask for it. It included per-round valuation and dilution info, shares
outstanding, other good stuff. Not liquidation prefs though. I've never seen
an offer packet like that before or since.

------
ChicagoDave
Ask that all payroll be secured for at least six months and paid through a
third party. Had a founder pull all the money out in 2009 and I lost $90k in
unpaid work.

------
karma_hard
try those questions:

\- do employees work overtime because they have to or because they want to? \-
what do you do to keep your employees happy? \- whats the turnover rate?

------
gammateam
the answer to every question on this list:

"We are a private company and don't share this information."

Outside of the room, the Engineering team laughs at your questions, Operations
and the CEO give each other quizzical looks before laughing too, and they go
on to the next candidate.

You get smug satisfaction for not going with "THAT Company who cant answer
simple questions", until a reminder about the rent payment comes in due and
all you want is a 30% pay increase over your last/current role.

~~~
aecs99
So true! I've interviewed with several startups (about 50-60) in the past,
over the course of 5 years. I had offers from most of them, while some of them
rejected me after the interviews (for whatever reasons they had). Your comment
is so close to reality (based on my interactions). Some laugh, some genuinely
have no clue, some act arrogant (you can either join based on whatever limited
information is provided, or leave), and some say they don't share any such
information.

I've worked at two startups in the past. The first startup tanked. When
interviewing for the next role, I did ask these questions, but had no luck.
Ended up taking an offer with 15% increase over my last role. Two years of
work, and I find out that this startup too, is on its way down. Eventually
ended up moving to a big company.

~~~
sroussey
You must have been doing multiple interviews per month, every month, for those
five years in order to get to the stage of getting an offer from a majority of
the 60 companies. That sounds exhausting!

~~~
aecs99
I did. Once I joined the companies that did not openly answer my questions
during interviews (about finances, strike price, etc.), I ended up realizing
all the negatives/problems of the companies from the inside.

Then on, I had only two choices: (1) ignore the problems and not worry about
future, or (2) act fast and start interviewing until I have options if
something goes wrong. I chose the second option, and hence a lot of
interviewing.

------
harlanji
5 years ago this would’ve been awesome, I asked all of this to 5 employers in
SF. Now in 2018 Silicon Valley we’re treated like chattle as coders/lower so I
don’t see the relevance of any of these questions beyond signalling. You can
be laid off at any time and for no reason or because of prejudiced liars who
want you off the team. Call me jaded, I’ve been screwed at almost every
startup and told simply that the pattern is me and left to die on the streets.
My #1 question is how we feel about lying, followed by how much I get paid per
hour (no salary, no options).

~~~
i_am_nomad
Maybe off-topic here, but: you sound very bitter, and that bitterness is no
doubt understandable. I'm currently being pushed around at work by incompetent
people who have lied routinely, and it stings. I'm sure the same has happened
to many if not most people in the industry.

But you and I both should let go of that bitterness and even forgive the liars
if we're to move on as people. I'll quote an old saying, "Holding a grudge is
like drinking poison and expecting your enemy to die."

------
ryanmercer
(I think it's hilarious I'm being downvoted for making a factual
observation...)

It amazes me how different startup culture, and tech culture in general, is
from the rest of the country.

\----

Every job I've ever worked at:

Relocation expenses? hahahaha

Equity? haha we'll wave your brokerage fee to buy as our stock purchase
program but if you wanna sell, you'll be paying brokerage fees.

Responsibilities? You'll do what we tell you, when we tell you, and you'll
live with it. If you don't like it, you're fired. You are disposable, we do
not need you, we can replace you in a matter of days with someone that'll
happily shut up, sit down, and do as they're told.

\---

Then of course things like bonuses. I've never had a bonus at any job I've
worked at in 17 years of W2 employment. Not once. In fact, I've never even had
an annual cost of living increase just a 'merit based increase' at some jobs
which is almost always less than inflation.

~~~
tudelo
Hmmm, I think relocation expenses are pretty standard, but not as high as they
may need to be if you need to break a lease or something like that.

~~~
hycaria
Any idea of the average (for the personal part of it) ? For a EU to US move ?
With like 5 years of experience ?

~~~
quaunaut
It's worth noting that relocation expenses don't change too much depending on
experience. They generally average around $10,000 from my experience, but it
isn't paid out in advance, but usually as a reimbursement. Some companies will
give you a card to do it on as a means of not having to be reimbursed, but
even that's rare.

~~~
hycaria
Thanks for the info.

