Maximizing Your Earnings on the Ground Floor of a Startup
Study a little bit of business theory.
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What can you do early on in a startup to maximize the amount of money you can make from it? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
If you're optimizing for money early on in a startup, I recommend the following
- Study a little bit of business theory so you understand what questions to ask and how to evaluate the health of a company.
- Prefer founding teams that have led companies to a successful exit (meaning an initial public offering or profitable acquisition).
- Ask about the long term growth trajectory of the business (expected revenue, products, and overall strategy for winning the market).
- Research competitors.
- If possible, get backchannel feedback from current and former employees. These don't have to be people in your social network - plenty of people respond to cold emails/messages.
- Ask about liquidation preference and the founders' stance on equity dilution.
- Focus on "impact". What business metrics do people care about? What projects move those metrics the most?
- After an initial period of ramp up, try to join the highest impact projects. The most valuable employees identify the highest impact work so longer term you should understand how to influence the company's decisions.
- Stay. Startups are roller coasters. Don't try to exit the first time you feel butterflies in your stomach. Careers are built on focusing on a single problem space and consistently executing over the long hall. If you're so inclined, this is also the easiest way to get your feet wet with engineering leadership since, after a year or so at a fast growing startup, you'll have more experience there than most of your coworkers (assuming the company doubles in size roughly every year).
- Don't be bound to your job title. Startup employees frequently wear many hats and having context about several areas of the business creates easier paths for leadership and opportunities to change teams or transition to new roles (e.g. PM).
- Be conscious of the story you tell to prospective employers. Even if you were hired as a software engineer, you likely played a much larger role than just writing code whether it was contributions to the product roadmap, recruiting, culture-keeping, mentorship, or something else. All of those activities increase your earning power and value to your future employers.
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