Once you’ve made the decision that joining a startup is your next move, you need to find one that will be the right fit for you. Startups vary across a large number of factors, and you need to do your due diligence before you commit to join. A very early-stage startup will differ from one that has received multiple funding rounds. A startup in a large, competitive market is different from one operating in a new, growing market. And no two founders or teams will ever be the same.
Start by clarifying what your personal motivation is for joining a startup and build an internal vision of where you want to be in the future. If your dream is to eventually start your own business, then joining an early-stage startup will give you critical insight into the skills you need to make this happen and provide the ideal environment in which to learn them. If you want to work in a particular area, like FinTech or mobility, then you can look for a startup working in the same space.
When you know the direction you want to go in, then you can begin by researching and creating a long list of companies that you might want to work at. There are three factors you want to account for on your list: 1) Domain, 2) Location, and 3) Stage. Once you've got a sweet list of startups, you can start ranking them. For example, if you really want to work in Berlin, then startups based here will be ranked higher for you. Super keen to dive into the world of blockchain? Then you'll push these startups up in your ranking, regardless of where they're headquartered.
As soon as you have your list of startups, you can move on to conduct your own analysis and assessment. In this stage of the process, a standard piece of advice is to think like an investor. You're ultimately trying to work out if this is the company you want to invest your resources in. In this case, you're not investing money, but your time. This is equally as valuable and involves many of the same business-like thought processes as if you were investing capital. Here, we break down the different dimensions you should take into account during your decision-making process.
At what stage is the startup you're looking at? The earlier the stage, the higher the risk. Companies that have been through several funding rounds tend to be more stable and lower risk, but if you join an early-stage startup, there are also higher potential upsides. If the company takes off, you could be in for a financial windfall, or even be able to increase your role and responsibility.
It also helps to look at who the company's investors are, as this can serve as an indicator of future success. If the investors are big players or very respected names, then you can feel confident that they have done their due diligence and that the company is a good bet.
When assessing a startup, one of the critical factors to take into account is the strength of the team, the best place to start is by researching the founders. Are the founders experienced? Have they been a part of previously successful companies? What are their relative achievements? If the founders have previously built and scaled and company, this can be a reliable indicator that the startup is onto something.
Don't work for anyone you don’t respect and admire.
A good idea, if possible, is to meet with the current company employees over coffee, before accepting a job offer. This will be an opportunity to learn more about aspects such as the internal relationships between the founders, the company culture, or even just the staff turnover rate at the company.
Role and Job
A key thing to bear in mind about your startup job is that there is a high chance it will change. By their very nature, startups are dynamic, agile environments, and your responsibilities can develop from week to week. Is the role you're taking on one that can develop fast and get you into a position of leadership and responsibility? If this is the case, then it will be worth the investment of your time and energy.
Get on a rocket ship. When companies are growing quickly and they are having a lot of impact, careers take care of themselves (...) If you’re offered a seat on a rocket ship, don’t ask what seat. Just get on.
Industry and Growth
Startups are at the core of market developments in a huge number of industries. HealthTech, Blockchain, PropTech, FinTech, FoodTech, Mobility, EdTech – the list goes on. Take some time to understand which industry you're most drawn to and then organize your list based on the industries that appeal to you the most.
Take into account the growth rate of the startup when ranking your list. The faster the growth rate, the more attractive it should be to join. A company that has grown from a turnover of $0 to a turnover of $100,000 inside six months is better than a company that has a turnover of $1,000,000 for three years in a row. Fast growth equals future potential.
City and Salary
For some people, the city a startup is located in will be a key determinant of whether to pursue a job there. Berlin is touted as the startup capital of Europe, and the fringe benefits of living in the city are numerous. This means that it attracts lots of people and lots of companies to set up here. If the geographical location of where your work is less important, then the world is your oyster. New startups are popping up everywhere from Lisbon to Barcelona to Copenhagen. If you're open to all cities, your options will be greater.
The final assessment point you should be looking at is the salary you're being offered. In many startups, salaries may be lower than in the same positions in more established companies. To compensate for this, many new companies offer Employee Stock Option Plans (ESOP). In this setup, you will receive a certain amount of equity in the company. If the company performs very well, or is acquired by a larger company, you could be in line for a big windfall.
When you've worked your way through all of these factors, you should emerge with several startups at the top of your list. To refine the process, we recommend creating a spreadsheet to score and rate each company and track your progress. Then you can take the next step and begin searching for the ideal role in your dream startup.