Success stories like Facebook have forever changed the startup industry and shown that working for up-and-coming businesses poses huge benefits in the long term. If you’re one of the lucky ones who managed to shine through your startup job interview and get a job offer, congratulations! You’re one decision away from a potentially rewarding future.
But before you seal the deal on that startup job offer, keep in mind that not every startup is a Facebook story in the making. Asking the right questions is critical in determining what your future could look like. So, before you step into startup unknown and sign a contract, here are six smart questions you would want to ask:
1. Has the CEO built a business before?
Working for startups is as risky as much as it is rewarding because not every startup is run by the likes of Mark Zuckerberg, who can turn a university-made website into a billion-dollar company in one try.
Studies show that people who have started and sold a startup before have a better chance of successfully managing the second startup than those doing it for the first time. Getting great ideas off the ground is easier said than done, so knowing your potential CEO’s experience and capacity can prove important in making your decision.
2. Are they willing to sign a non-disclosure agreement?
This is an unconventional but smart move that lets you directly ask important financial questions. Keeping in mind that small businesses are not as stable as corporations, it would be good for you to get a better picture of where they’re going before deciding to work for a startup company.
This could be done by signing a non-disclosure agreement so you can get the information you need while assuring the protection of their data. In a way, it can even serve as a litmus test because a startup that’s not willing to share the status of their financial standing may be one you would want to steer clear from.
3. What is their year-over-year (YOY) revenue and burn rate?
When you work for a startup, the collective understanding is you get a market-level salary in exchange for receiving equity in the business. Although this promises great benefits overall, this is highly dependent on whether the startup succeeds in the first place.
An effective way to identify their stability is by looking at its yearly growth rate and how quickly they are spending cash flow. Is their profit increasing or decreasing? Are their financials sustainable? A negative YOY can be an indicator of an uncertain future. At the end of the day, equity from a failing business will not be worth as much, and a company with a better salary package would be a better option.
4. Where are they getting their money from?
Studies show that most startups fail because of a lack of capital. Although a great idea may sound promising, it is not enough to sustain a business. A startup that looks stable in their first year can still fail if they are unable to keep bringing in money.
The key is good funding; solid financial backing is what grows the business and keeps it going. A startup financed by angel investors, venture capital, or even crowdfunding is a good indicator that they are geared towards the future. If they were worth funding, then perhaps they are worth considering.
5. Where would they like to get more money from?
A startup positioned for success will have an unclouded vision of the bigger goal they are aiming for. This means expansion and stability will continually be on the agenda.
One of the insightful questions to ask before job acceptance is their blueprint for innovation. Do they plan to seek out more investors or broaden their service or product lines? A startup that seeks to secure more funding and revenue is a business positioning itself for growth. These businesses have immense potential and pose the best returns on equity that you may get in the future.
6. What are the biggest challenges their company is facing right now?
When it comes to climbing the career ladder, a strategy is essential. Evaluating how the company can maximize your expertise can make a difference in your career growth trajectory.
Extensive hours of work are given when it comes to working for startups, so strategically placing yourself in an environment that will provide the right platform for your skills to shine and be maximized will be a smart move. Because you are part of the solution to their problem, you ultimately increase your value as an asset to the team. This can prove rewarding in the amount of equity you may receive in a startup that succeeds and eventually goes public.
Choosing the right company for you
At Infinity Consulting Solutions, we can provide a targeted selection of vacancies that is right for you. The startup future can be fruitful when you join the right company, and the application process can be easy with the support of an expert team. Contact us today and let our team help you get started on finding the best match for your career goals.