Hello Princeton Spark listeners! What you’re about to hear is Part 2 of You Have a Job Offer from a Startup. Now What? It was supposed to be a single episode, but there was so much good content, I split it up into two episodes. If you missed Part 1, you can get it wherever you got this episode. Two for the price of one! A bargain at twice the price! 

What follows is another journey through space and time, through the market in which a startup finds itself, the size and scale of the opportunity, Barbara Streisand songs, negotiations, other factors to consider, the long and short term implications of your decision, and how to deal with all of these things. 

What’s more, we’ve made the entire workshop available as a separate download at princetonspark.com or in your podcast feed. With that, let’s return to You Have a Job Offer from a Startup. Now What?

From the Princeton Entrepreneurship Council, this is the Princeton Spark. I’m Wright Seneres, social media and marketing specialist at PEC. 

(Theme music)

The various people that make up the Princeton entrepreneurial and innovation ecosystem have long been at work, taking risks to bring transformational ideas and companies to the world, in the Nation’s Service and the Service of Humanity. These are the stories of Entrepreneurship the Princeton Way. 

At PEC, we support Princeton-connected startups and help to build the regional entrepreneurial ecosystem in New Jersey and beyond. 

In this episode, we’ll tackle the question of what to do when you get a job offer from a startup. At PEC, we recently began a series of workshops for startup founders with this very topic, and so our audio is from this session. 

And this sage advice from our panelists could apply to any job offer, not just ones from a startup. 

Now we shift gears and propose an idea for you, the startup job seeker. If you’re going to listen to offers from startups, you should be evaluating these startup companies as if you were investing in them. Because by working at one of them, you’re making a bet on them. So what kind of homework should you be doing on these companies? Here to tell us, is Tom Vander Schaaff, a Princeton alum, and general partner at Edison Partners, a venture capital firm in New Jersey. Edison Partners mostly focuses on later stage companies, but the concepts in evaluating a startup are very similar. 

Tom Vander Schaaff: I would put a heavy onus on evaluating the people and making sure that they're truly going to invest in you and mentor you. The payoff may take some time, but it's probably going to lead you to much, much higher heights over time.

And then, you know, you can look at different things about the financial performance of companies. Our goal is to invest in companies that have gotten to some commercial success. So we measure that by revenue, by growth of the business year over year. These are things that are important that will help establish for you some baseline of how the company is performing, and how well past results may not necessarily assure you of any future results kind of thing. It'll help you get a sense for what it could accomplish, particularly with capital in the future, and hopefully, build your equity value.

When I’m not saying “Don’t count your strike price chickens until they’re hatched, granted, and vested,” I always say, “Context is everything.” So when evaluating a company from the job offer standpoint, Tom says you are well-advised to look at the market around it. 

Is it a growth market, is it an interesting market, whatever aspect of the market that may be appealing for you? Is the company currently or prospectively a leader in its market? Or is it very commoditized and having a difficult time differentiating itself? These are things that as an investor are important, and I think, for your sake, figuring out the longevity of the opportunity that you have in front of you. And is it a highly evolving marketplace could add to excitement and learning or could be a warning sign of the risk levels. 

As I mentioned, growth and traction in markets. Those are easy things to measure if the companies will share enough information, so you need to ask pretty proactive, probing questions. They're not similar to the discussion around your employment letter, most companies are going to be relatively secretive about their information with prospective employees, they're not just going to tell you that they have X number of customers or Y amount of revenue, so you need to ask specific questions. And more often than not, you'll get at least a directional sense of the size and scale of the opportunity. And then you need to fit that with your own parameters of what you think are valuable, right? Like it's it can be exciting if you're getting into the ground floor, right? But you have to be cognizant of that, that risk level is very, very different than if you're going to go join Google right now. But if you joined Google in ‘98, that’s a different story, right? So you have to be thinking about how and what your goals are.

You can hear Tom’s complete remarks in the full audio from the workshop. But he will take us to the break, right here. 

If I could reemphasize one critical point though, it's mostly about the people. 

Are these folks that you could envision working with quite some time? Are they going to afford you connections that are a value to you over the course of your career.

People. Like the great philosopher Barbara Joan Streisand said, “People. People who need people are the luckiest people in the world.” And I know what you’re thinking. You’re thinking, “What does this Barbra song have to do with anything?” That...that’s after the break. 

Hello podcast listener. I would love for you to send this podcast to a friend, but if you’re like me, and I know I am, I’m probably washing the dishes as I listen to this podcast. So you probably can’t quite send this to your friend right this second. That’s okay, just remember this handy dandy acronym and send it when you’re done the dishes. Ready? Here’s the acronym: S-P-A-R-K. Spark. 

Send
Podcast
Along;
Recommend
Kindly

That’s: Send Podcast Along; Recommend Kindly. And send the Princeton Spark to a friend. Now on with the show. 

Welcome back to the Princeton Spark, a production of the Princeton Entrepreneurship Council. We just heard from Tom Vander Schaaff about how his venture firm evaluates companies and how you can use those techniques as you evaluate a potential employer, whether it’s a startup or more established company. You can hear the rest of his remarks in the full audio on our website, or in your podcast feed. 

We now turn to two people from True Talent Advisory, an executive search firm. You could say Rachel Yee, a freshly-minted Princeton alumna, and her colleague Greg Brooks, are people that help people that need people. At the startup job offer workshop PEC offered, they spoke from the recruitment side about four things to consider when you have that job offer. Here’s Rachel on criteria to negotiate.

If you do have an offer, regardless if it's to a startup or not, just the statistics alone, are that only 7% of undergraduate women and 30% of undergraduate men even attempt to negotiate.

In terms of things that you can negotiate with a startup offer, things that I didn't even think about, you can look at your offer acceptance deadline. I know some companies send out exploding offers which can put a lot of pressure when you're navigating different offers. So that is something you can negotiate.
 
Start date. My start date was set for four days after graduation, I pushed it back. Base salary, bonus structure, even a relocation stipend, that's something that people don't often think about. But that is a cushion to get you started.

Fringe benefits that are health related. Look for healthcare, other fringe benefits that might be like a cell phone reimbursement or a gym reimbursement, all these things that you might not think about, but add up and paint a bigger picture for what you could be looking for

There’s also equity, which venture lawyer and entrepreneur Jason Meyer described in Part 1. If you missed it, go on and give it a listen. And continuing education. Next, Rachel talks about other factors to consider:

Other factors to consider when you're thinking about your overall offer is thinking about the product and the team, the people that you'll be working with, I love the people at True, honestly, it's awesome that Greg has come with me. But I really look forward to going to work every day. And that's not something I thought I'd be able to say. Even thinking about your commute. If you're going to be commuting into SF think about if it's an hour and a half commute, is that important to you? What kind of time do you want to be spending doing that on in terms of growth, thinking about your personal growth within the company, as well as your professional growth. Also, even articulating what your concerns are is a really good exercise because maybe that's an area where you can continue to monitor within your first year. Vacation. PTO. This is something we can probably talk about as well, but a lot of startups offer unlimited PTO. I think that is a double edged sword. A lot of people end up not even taking vacation time off when they have unlimited PTO. But that's something to consider. And then thinking about your criteria and roadmap for promotions, ask about that, know what the next steps are. And if they don't have that, maybe creating your own structure. And at the end of the day, it all comes down to a gut feeling after analyzing all the data points.

It’s a lot to think about. But is it too much to ask about? Here is Greg Brooks, a partner at True. 

Sometimes it feels like you shouldn't ask these things or you shouldn't bring them up. It's going to be a negative. But I think oftentimes, in a startup, if you're having the foresight to think through these things, they're going to be looking for individuals that are thinking outside the box and are not just going with the status quo. Because I think ultimately, your day-to-day there's going to be a lot of figuring things out and maneuvering. So if you're coming to the table, and you know what your ideal situation is, and you're showing that you're already maneuvering, I think that that's generally a plus.

Rachel and Greg also talked about long and short term implications of your decision, especially for people just starting out:

If you go to a startup, one of the big benefits, and really what should be a driver for you is the immediate impact. So it's going to be a small team, you're going to be tasked with a lot of things, typically, every day is going to be a little bit different. And if you're the type of person that wants to be able to get in and kind of work hard and solve some problems, to really move the needle, you're probably gonna have a better opportunity to do that in a startup than a larger company where you're often going to be working within a framework that's already been established. With that, you know, I think that there are you know, some cons that come with it. Obviously, work-life balance is going to be a consideration. People in startups are working often very long hours through the weekends, etc. So, you know, with those benefits, you'd have to consider that. But there are other, you know, positive upsides including, you know, it's a high risk, high reward situation, we've talked about kind of the financial implications or the ability to grow a company, which is always a nice thing. So you know, ultimately, if you are putting in long hours of there should be some sort of payoff. You're also getting exposure to a lot of different components of the business. So if you're not quite sure what function you want to be a part of, if you're starting a startup, you're probably going to have a chance to get involved in many different components of the business.

That all sounds pretty good, but…

The other thing to consider is that if you do join a startup and you're brought in for one specific thing, there's a possibility that you do get a little bit pigeonholed into one thing. So if it's a business focusing on one thing and you're working on one component within that business, and you continue to go down that road, typically a startup is going to be somewhat unique by nature. So when you look to move from that company, if you've only been focusing and one niche in a niche business, then you're gonna have to find a way to kind of expand out of that.

What about later in your career?

Later in your career. You know, I think that there's a lot of pros, especially if things are successful. You know, you're better equipped to start your own company. We see a lot of folks that are part of the business that scale successfully, and then they may decide that they want to go back to another business that is looking about the same as the one that they started and they want to scale again, other people say, I've already done this work, we've already scaled it, you know, I'm ready to move on to a more mature company, perhaps I can consult other businesses. So you do have some options there. And then from a con side, you know, later in your career, you could be worn out, I mean, you could really pour yourself into a startup that is viable for a long period of time and doesn't reach the level of success that you were hoping that it would. And then if you find yourself later in your career, and you've spent all your time at this one startup and it hasn't developed, then you need to find a way to kind of pivot out of that. So I think one of the considerations here is and I think we mentioned it before, you know, with gut feeling is you'll get a feeling when you start working for a startup, how things are developing, you know, is the leadership team doing the things that you would expect them to do for the business to be successful? And I think all of those things will be important for you to keep in mind throughout your time there to make sure that you're ultimately joining a successful organization or making the decision to pivot to another organization.

They also talked about exit options, which you can hear if you download the full audio of the workshop. You can get it at princetonspark.com or in your podcast feed. And speaking of exit, here’s where we exit, stage left. 

Credits 
The Princeton Spark is a production of the Princeton Entrepreneurship Council, and produced by me, Wright Seneres.
 
Engineered by Neal Bituin on location at the Center for Career Development at Princeton and Dan Kearns at the Princeton Broadcast Center.  

I designed the sound and music for this episode. Our theme music is by the Treadmills. 
 
Special thanks to Alice Seneres, Neal Bituin, Lauren Bender, Scott Colan, Jason Meyer, Tom Vander Schaaff, Rachel Yee, Greg Brooks, and the staff at the Center for Career Development.  
 
The comments and suggestions box is always open – send an email to sparkpod@princeton.edu. If there is a topic on entrepreneurship or a person that you would like to hear from, please let us know.
 
Follow us on Twitter, Instagram, and Facebook at @princetonspark. You’ll find some extra content there, you can put some faces to the names and the voices that you heard on this episode, and more. 

We also have a newsletter so you don’t miss out on anything Princeton Spark. You can sign up at PrincetonSpark.com. 
 
The views expressed by our guests on the show are theirs and do not necessarily reflect the views of the Princeton Entrepreneurship Council or Princeton University.
 
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Thanks for listening.