Joining an early stage startup - Need guidance
So, I am an analytics guy with almost 5.5 YoE under my belt. My latest transition was to Phonepe that I made this year (feeling shitty here already, given the kind of work creating almost no impact) I saw a post on LinkedIn where the CEO of this startup recently raised some pre-seed funding (~1.5mn). Since I was following them for almost 6-7 months before this, I reached out to the founder on LinkedIn. We first had a virtual call where we got to know each other and after that discussion, he called me over to his place where we further talked about the idea, the scope and the future while also discussing what I could bring to the table. Post that, we met again, and this time with the other co-founder who deep-dived a slight bit into the tech stack that I had worked on. It seems that all is going well, but the founder, in the first face to face meeting told me that for the time being (for almost the next 3-4 months), he'll be able to pay me a monthly amount which is less than half of my current in hand pay, post which it'll be reviewed and adjusted accordingly. How do I negotiate this now? Also, since the team size is super small (only 5 full time folks and one customer support part timer), how do I negotiate on what equity I take (looking for a benchmark number here)?
Having given crucial 8 years of my life to startups, I believe those were worst decisions.
Just joined a reputed MNC, much better salary, much better work, much better work life balance.
Let me know if you need further reasoning, happy to help
Hey, thanks for the inputs. Much appreciated! Let's discuss this further, can we?
Biggest drawback of pre-seed company is that they are constantly pivoting. There is actually a term for this, it is called pivot hell.
Every time they pivot, they will be 100% convinced that this particular idea will work, and they will convince you to put weekends, late nights into building it. Of course you will be promised that you will get a balanced life once the product stabilise.
But, they will pivot again, and the story repeats.
At any given point of time, no body remembers the effort you have put into building products that have been discarded. Gratitude for your hard work gets reset to zero every time a new idea comes.
You will have teammates acting as cofounder, some of them might literally be sleeping with founders or their close ones. They will add a few extra dimension to office politics.
In Large orgs, people get into politics so that they grow in their career, even if it happens at the cost of others. In small startups, there are a few extra dimensions. Founders play manipulation game to make you work harder than you should. There are higher chances of growth, so politics is generally more intense. Founders generally have their favourites, and these are the only people that gets rewarded, but you will have to spend 2-3 years to know who their favourites are. Why it takes 2-3 years? They have to make everyone feel special and favourite so that they can extract as much as they can from you. They might have started giving you a vibe that you special for them, generally this process starts from the interview process itself.
Salary increments may not happen. Next year, they may come up with some stories to make you feel guilty for even thinking about increments in times that are tough for company.
The boundary between colleagues are friends are more blurred in small startups. It is so friendly that they will call you as a friend when you are on sick leave. But, become a colleague and assign some task in the same call itself.
Don't join a pre-seed startup. It means they have no good product, no users, no validation if the team can even build something.
It's better to join a startup with Series A, B or C funding.
Pre-seed equity is pretty useless unless it's some crazy profitable/innovative startup or the founder is Bhavish Aggarwal who can raise at arbitrary valuation.
Chances that your company will survive are always slim (even worse in this environment). It'll be years or even decades before you get a meaningful exit.
Benchmark for equity pre-seed should be 1-2 x base (4 year vesting). Also, 50% cut feels exploitative unless you are earning a lot more than market standards. I wouldn't trust founders who are not ready to pay for good talent.
I made a similar move last year. Unicorn -> seed. Managed to get a small hike. Overall, it turned out to be a bad move because the company's shutting down and the current job market is really shitty.
I would still do it for the lessons I learnt but only because I can afford to take that risk.
Got it, thanks for the information. Pretty useful 😃
its the worst time to join a startup. Get out at the first chance. This is equivalent of asking for a window seat in MH370