A little while ago I was asked for 'the top 5 things to look for to determine if an entrepreneurial opportunity is the right one for you'. I understood it to mean how to assess an offer to join a startup and answered it as such, only to find out later that it was about assessing which idea to pursue. Interestingly the high school kids I'm mentoring are going through the same exercise of coming up with ideas and seeing if they measure up, so I'll do a post on this soon. For now though, I'll share the answer to the question I thought I was asked - there's actually much benefit in thinking about what kind of startup you'd like to join as it overlaps a lot with what kind of a startup you'd like to build yourself.
To start with, let's assume that you're OK on the compensation front of salary/benefits/equity in whatever proportion. Also, let's assume the logistics, hours etc. are not a problem. Apart from that, here's what I'd recommend you look at, pretty much in order of importance:
1. The team. Do you respect their expertise and, just as importantly, their values? And the most critical question, do you think you can mesh well with the group and their style?
2. The offering. Is it something that you believe you'll find compelling day in/day out, especially at the end of extra-long days? Do you believe you can sell what the company does with passion even if you're not in sales?
3. The plan. Granted early stage startups' biz plans are likely to change as they progress and they may need to prove some things first, but does the sales/distribution plan hold water? Is it in the realm of possibility? Is the market addressable and believable? Is the development plan achievable and the funding feasible? At this stage it is really only a sniff test, but you should look at these points as an investor, of time and energy if not money.
4. The role. Depending on the stage, you may wear many different hats, but still, you need to know what's the core contribution you'll be making and if it makes your heart sing. Startups can be great learning opportunities, in fact, sometimes that may be all the reward that you get when the promise of a big payoff dissipates. But if you're going to spend huge chunks of time doing stuff you don't care about, why bother?
5. The exit. Both yours and the company's. AKA 'worst case scenario'. Everyone will say 'IPO', or more likely, 'M&A' for the company's exit plans, but what will happen if the company doesn't meet it's goals? Shut down, sell the technology, keep it going because it will produce revenue from year 1? And about your exit - what are the events that would cause you to leave? It is always good to have the point at which you call it quits identified well in advance as it will save you a lot of sleepless nights later on. And the reason why this is important before you choose the startup is that it may vary based on the points above, and you should feel comfortable about your exit plans, the timing and the inevitable impact on your future. Check out my previous post on this for the entrepreneur's take.
Finally, there's one last question to ask yourself - would you have fun?
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