Questions to ask before joining a startup
The questions can be categorized into two sets Future of the startup (Macro picture) Future of your role at the startup (Micro picture)
Both of them are equally important. However, I have read advice where some people say if the Macro picture (1) is going to be great, your starting role within the organization matters less because it can evolve surprisingly well! And that is very much true: if a company is growing, new roles, projects, and opportunities will be created, and you can accommodate as much as you want on your plate.
Most big tech or other public companies have a growth rate of 10% or 20% (dictated by their industry and country). With startups, especially, I've felt that the growth rate varies in order of magnitude. Your growth will be a function of the company's growth x your performance. Startups are growing nowhere, and there are startups doubling revenue every year. Having said that company growth is extremely tough to predict, and most VCs fail too (any portfolio only sees 5-10% of companies succeeding). But you can take an idea from how they look at companies (and this is what the first set of questions could be)
Some of these questions change depending on the size/stage of the startup you are looking at. For a later-stage startup, business-related things (financial, upcoming projects, funding) would matter a lot more. For the very early stage, I would say the team is the deciding factor (not even the idea). For tech products, I think a crucial signal you should look at is the team caliber and pedigree. A tech product's experience will always be bottlenecked by how good the tech team is. And if there are high-caliber, intelligent people on the team, you can say with decent probability that even if the idea doesn't work out, they will pivot and make something else. So, in a way, you can be guaranteed a decent outcome with a strong team. Ideas change for many startups during their initial 1-2 year, so the team is what is crucial, especially in the very early stage.
I'll enumerate all the questions here I can think of.
Questions regarding the future of startup
(idea/product)
- Ask questions about different features of the product.
- Who is the ideal user for the product? (or target segment). What is the value addition of the product? (For example at Babblebots, we are an interviewing platform so you may think that the most significant value add is the ability to interview and provide a score to candidates, but we have realized that the most significant value add is saving the hassle involved in scheduling interviews
(team)
- If the startup is in stealth, ask for the LinkedIn profiles of the current team. Otherwise, look at the LinkedIn profiles to gauge the strength
- What are the plans to hire in the upcoming year? Overall and in your immediate team?
(financials, market, funding)
- What is the TAM (total addressable market for the product)? This is what the startups chase. Basically, it is the size of the pie they aim to capture.
- What's the runway left? Basically, the amount of cash they have left to keep running.
- What was the last funding round? How soon do they plan to raise the next round? (and at what valuation)
- What VC companies have invested in the startup?
- Who are the immediate competitors in the market? If it's not an entirely new idea, how does it differ from its competitor? If it's a new idea, how is the reception from customers?
Questions regarding your role at the startup
(role/growth)
- What is the structure/hierarchy? Who will I be reporting to? Who will I be working with?
- You can also ask to talk to someone from the team to get an idea.
- What is the scope of growth in the current role? What will be expected of me?
- (If you want to) Can I contribute to other roles such as ...?
At a later stage of discussion, the below becomes relevant.
(policy/benefits)
- Does the company award ESOPs as part of renumeration? (if yes) What is the stock price? How many ESOPs will I get? What is the vesting schedule? What is the policy of exercising ESOPs at the time of leaving?