When’s the Right Time to Join a Startup?


Imagine for a moment that you’re among the most fortunate people in the world: Four promising startups have offered you a job, each company at a different stage of its evolution. You have to choose one as the next step in your career path. But, which one?

The Companies:

Imagine, further, that the salaries for each job are the same and each company is a 20-minute drive from your home. In some ways, the companies are equal, yet their prospects and the likely rewards are certainly different. And remember: Most companies never make it to a profitable buyout or IPO.

We asked three successful entrepreneurs and a tech recruiter to consider our scenario and share their recommendations for best choice, along with the thinking behind their decision.

Risks and Rewards

For Rod Turner, a longtime CEO, entrepreneur and angel investor now associated with crowdsourcing site www.start.ac, the answer is simple, based on the likelihood of actually being rewarded.

Turner selected company 4, “because it is already a success. The others face serious risk factors that make them less attractive.” You may get more by joining earlier, but only if both the company survives and you survive working there while your options vest.

“In my experience, the reward-to-risk ratio is best in this scenario. But of course it depends on the specifics. The reward for being a key part of a big success is not just financial – it involves career acceleration, a new and better platform for the next moves, etc. Plus the fun factor is far higher day to day in a successful company versus one that doesn’t make it.”

Is It All About Money?

Testing company Appvance CEO Kevin Surace agrees that company 4 gets you closest to money. But, he asks, “Is that really want you want?”

“The statistical risk from 1, 2 and 3 don’t get you much chance of making money if that is indeed your goal,” says the former Inc. magazine CEO-of-the-Year and serial entrepreneur. “But perhaps money shouldn’t be your goal.”

He adds that, “great companies are built by passionate, smart people who solve a real pain point for customers. That should be your goal in all cases. If you can contribute in that way, then don’t worry about the money. It will happen this time, or next time, or maybe never, but you will lead a very rich and full life.”

What’s Your Ideal?

A senior recruiter at a major tech recruiting company, who asked not to be named, says he has a personal strategy for handling this sort of question when matching talent to opportunity. “I always ask candidates what their ‘ideal’ opportunity looks like, and use that as general compass for looking at opportunities I present,” he says. “I ask them to break it down into three areas: commute, culture, compensation.”

For himself, the recruiter thinks in terms of control over his work, mitigation of risk and the best possible compensation he can get with the first two priorities in place. “Looking at the four options presented, that eliminates companies 2 and 3 for me,” he says. The reason: Neither would offer as much control over his work as company 1, or the security of company 4.

“Company 1 seems like the bigger risk, but the influence the role has is appealing.”

Company 4 would be my top choice. It’s already successful, has good prospects for the future, a lot of the early mistakes have already been made and an IPO looks eminent. That’s versus waiting for the next survival infusion like 2 and 3.”

Serial entrepreneur Ben T. Smith IV has a different view. “There’s no right answer. It depends on the point in your career you are, and your personal situation on risk.”

Smith, founder of Wanderful Media and other startups, offered specific questions to ask each of the four companies. Each set of questions builds upon the previous ones.

Of course, all things are seldom as equal as presented in this scenario. Having four simultaneous offers from interesting companies isn’t common, and the offers themselves are unlikely to have equal upside potential.

The best answer may not be so much about the offer or even the company, but what you’re about in terms of wants, needs and goals. In the end, says Smith, “just pick the one where you love the team, the mission, the challenge and the growth opportunity.”

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