Going to work with a start up?

College Majors Engineering Majors
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<p>Anyone with experience in a start up? I read an article about how start ups are having a hard time finding engineers/software engineers. Are there many of these opportunities? What kind of risk is involved? What is the compensation usually like (low pay, no pay + shares?)? Who is qualified for these opportunities and how does one find them?</p>

<p>I'm reading Steve Jobs' biography and I'm really interested in Steve Wozniak. He was a brilliant electrical engineer with no business skills. He was introverted and played it safe most of the time, initially refusing to quit working for HP. He dreamed up the Apple I almost completely by himself, gave away the schematics to hobbyists, and offered to give it to HP. They didn't want it, so he got in with Steve Jobs and is now a millionaire (net worth ~$100 million). That's the nutshell version, anyway.</p>

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<p>I have never worked for a startup but one of my good friends did. Pay wasn’t the highest but you had stock options. If the company made it, he would have made a bundle (so you can guess the final result). They were running on venture capital. It would dry up occasionally and furlough everyone. My friend viewed it as extra vacation time. Good thing he could live cheaply and had money saved up. It was a small company, so he had a lot of freedom to do several kinds of work that he wouldn’t have had working for his old big company. Anyways, life was great until one of the venture capitalists changed his mind and stopped funding it. Made a lot of noise doing so and so scared off all the other investors. Here today, gone tommorrow.</p>

<p>Met a guy who founded a big name company as a start with four of his friends. He was now a multi-multi millionaire. He said that this company was the 5th startup he was involved in. I asked him what made this one work and the others fail. He said that he could really tell but would have only ranked this one (the winner) as the third best idea of the five. </p>

<p>If you are young, it may be OK to take a chance on a startup. The older you get (wife, kids, house, etc) the more you need a dependable income stream and may not want to go the startup route.</p>

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<p>If you are talking about software startups, there are many, mostly found in locations where there is a vibrant angel and/or venture capitalist community, such as the Silicon Valley.</p>

<p>You should probably read techcrunch.com, if you are not reading it already, and follow the news reports and comments on the companies they cover. It will give you a general idea of what’s considered newsworthy (by techcrunch.com’s followers, at any rate). Another source of info is ycombinator.com.</p>

<p>Off the top of my head, here are some pros and cons:</p>

<p>Pros: as a founder/early employee, you have a greater chance of getting a larger equity stake in the company; you have more opportunity to influence the company’s core business; you can work on many different tasks within the company, not all of which may be technical.</p>

<p>Cons: you will probably work quite a bit of overtime; there is always concern about the next round of funding; the focus of the company may keep you from working on some other, possibly more viable technology.</p>

<p>As far as pay, qualifications, etc. go, it is highly company-dependent. Look at the various startups for one that matches your interests, contact them, and see if they will consider you for a job. Good luck.</p>

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<p>I have. It’s a lot of work, but great fun! You can also make a lot of money. </p>

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<p>There are some opportunities. There are also opportunities to work for free in exchange for stock options. </p>

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<p>The basic risk is that the company folds and you lose your job. That you work ungodly hours and never see dime one. </p>

<p>In the mid to late 90’s, when I first got involved, there really wasn’t much risk because there were so many opportunities. Around 2000 it got crazy and VCs would fund just about anything. By 2002, things went downhill really fast. </p>

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<p>In the glory days, the pay was often higher because VCs cared more about getting the product to market fast than getting value for the salary that was paid. Because valuations were so high and the potential return on investment was so high, this actually seemed to make “sense”. </p>

<p>Since the bubble burst, the salaries may not be as competitive and stock options not as generous. Because valuations are lower, it’s much more difficult for entrepreneurs to get investors without having a lot of skin in the game. That means there is less upside to go around. </p>

<p>If you take a lower salary in exchange for stock options, you are in effect investing your own money in the company. You can actually calculate how much you are paying and whether it is worth it to be an employee. It often isn’t. </p>

<p>When my last startup closed, and I got an offer to work for another one, I had to add a lot of extra decimal places in the spreadsheet to figure out what fraction of the company was being offered. If the company would eventually be worth a billion dollars, my shares might have been enough to buy a new $30,000 car, LOL! Of course the next round of financing would require more dilution. Didn’t seem promising. I got a job in the defense industry instead, which still seemed healthy. </p>

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<p>If you have the right mentality, many people are qualified. You need to not be afraid to lose your job. </p>

<p>I believe that the San Jose Mercury News used to publish the annual “Money Tree” with a list of companies that got VC funding. You can look on the web sites of top VC firms and they usually have their portfolio companies. You can check them out and email your resume. </p>

<p>You can also look on craigslist, LinkedIn, etc.</p>