When is the best time to join a startup?

LAST REVIEWED Oct 26 2018 13 MIN READ

By Anisha Sekar

Are you looking to leave your big corporate job for a move-fast-and-break-things startup? Congratulations! Whether you want complete autonomy and high upside, or a lower-risk, more balanced environment similar to larger companies, the startup world can deliver. Though tech companies come in all shapes and sizes, there’s a stark divide in personality, benefits, and drawbacks of big companies versus startups. (Check out this post by Julie Zhuo, Facebook’s VP of product design, for a detailed look.)

But even within startups, there’s quite a bit of variety, from two-person outfits fresh out of incubators, to slow-and-steady businesses whose headcount has hovered around 30 for the past few years, to are-they-still-technically-startups companies with thousands of employees in an impending IPO. Each stage of startup life has its benefits and drawbacks, and the best time to join a startup will have a lot to do with your own values, risk tolerance, and desired office culture. We’ll break down the four main startup stages and help you decide which is right for you.

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First few employees: You’re basically an entrepreneur  

Characteristics

  • You’ll be one of the first non-founding hires

  • At most one person per function, and most roles are unfilled

  • No venture-stage funding

  • “Product” can be anything from an idea, to a prototype, to a minimum viable product (MVP)

  • Usually lacking a marketing strategy, product-market fit, or set-in-stone business plan

It takes a very specific type of person to become one of a startup’s first employees. Essentially, you’ll be a mini-CEO, responsible for handling all aspects of whatever you’re working on. Roles don’t really mean much, since everyone does pretty much everything. You’re responsible for deciding what to do, figuring out how to do it, and actually getting it done. Whatever you do, though, you’re probably learning it on the fly. It’s exhilarating, exhausting, empowering and terrifying, which is to say, it’s catnip for a certain type of person and hell for everyone else.

Benefits:

  • Pretty much complete autonomy

  • You’ll be improvising most of the time

  • Very high upside

  • A small, cohesive group that can operate without oversight

  • Direct contributions to the company’s success

Drawbacks:

  • Direct contributions to the company’s failure (and don’t be fooled, most startups do fail)

  • No true time off – you’re always on call

  • Working 12+ hours a day during the week and 8+ hours on weekends is more a norm than an exception

  • Equity may not be significantly more than you’d get as the fifth or 10th employee, but you’ll face substantially more risk and effort

Best for:

  • People who want to found their own company in the near future

  • Risk-takers who pour themselves into their work

  • Those who take cross-functionality to the extreme and can do everything from sales to strategy to engineering to support

  • People who will try anything to hit that first major milestone

  • Those who are at their best when lurching from crisis to crisis

Early stage: make or break time

Characteristics:

  • 5-10 employees, typically no more than one or two per function

  • Product has gone through a few iterations, though it’s still close to the MVP

  • Has some social proof in the startup community – secured venture funding, graduated from an incubator, etc.  

  • A few major wins already notched, like signing a paying customer (for B2B companies), attracting a solid number of users (for B2C), or sealing a name-brand partnership

The archetypal vision of an early-stage startup is a small knot of people in a garage, each staring intently into a monitor and cycling through ideas until one of them sticks. That image actually isn’t too far off. Early-stage companies might have a product and a business model, but will likely alter both as they find product-market fit and get feedback from paying customers. This kind of environment is catnip to anyone who prefers improvisation and creativity to routine and authority, and comes with the benefit of directly impacting the company strategy, product, and culture. But, of course, there’s a downside: startups are risky, ambiguity can be stressful, work-life balance is often out the window, and in the absence of an HR team, bias and discrimination can sneak in.

Benefits:

  • High upside – if the company succeeds, you’ll have tons of equity

  • Lots of autonomy and the ability to grow into leadership roles as the company expands

  • High-variance days where you’re rarely pigeonholed into one single function

  • Your work is significantly easier since the company’s already signed its first customer (or acquired its first 1,000 users, or hit another zero-to-one benchmark)

Drawbacks:

  • High risk – 90% of startups fail in their first year

  • An often confusing atmosphere with many failed efforts

  • Work-life balance is out the window; your work is your life

Best for:

  • Generalists such as full-stack engineers, business strategists with experience in multiple roles, and sales/marketing crossovers

  • Those comfortable with putting in 60-hour weeks and working nights and weekends

  • Those who thrive in uncertainty and improvisation  

Mid-stage: Move fast and break (fewer) things

Characteristics:

  • Solid funding with at least six months of runway, even if the company isn’t profitable yet

  • Typically Series B through D, but includes more established Series A and fast-growing late-round companies as well

  • May have product-market fit, but likely still refining sales pitch, product, and strategy

  • Enough customers or users that the company has a public presence

  • Anywhere from 50 to hundreds of employees

Once a startup has been around long enough to secure at least Series A funding, you know it’ll be around to stay (at least for a while). While the overall company vision might be set, strategies from sales and marketing to long-term product roadmaps are not yet solidified. This stage features greater role definition – rather than having a marketing person, for example, there’s a whole marketing department with content, product marketing, communications, or other specialists. You’ll still have plenty of room to experiment, but it’ll be within narrower confines.

Since the company probably has paying customers or a high volume of users by this point, the downside of taking down the website with an errant line of code or drawing the Internet’s ire with an ill-timed tweet is higher. As a result, there are more processes in place to make sure anything customer-facing is up to standard. You’ll also see more middle managers and experienced leaders than in an early-stage company. Finally, while teams may have both junior and senior members, junior members usually still pitch in with strategy and senior members occasionally roll up their sleeves for tactical work.  

Benefits:

  • More job security

  • Greater work-life balance and the ability to work

  • You can build on previous successes – the second 1,000 customers are infinitely easier to sign than the first 1,000

  • Probably offers perks like a matched 401(k) plan, commuter benefits, and generous medical, dental, and vision insurance

  • Is usually obligated to offer at least basic health insurance and parental leave

Drawbacks:

  • Less upside, since the company’s equity will be spread among more employees and investors

  • Fewer opportunities for younger employees to move quickly up the ranks

  • The transition from individual contributors to managers can be a rocky one, especially with inexperienced leadership

Best for:

  • People who have or want an area of focus, but are still comfortable branching out – for example, a content marketer who can pick up the slack on social media, or a web developer who can learn mobile in a pinch

  • Those who want work-life balance alongside the intellectual stimulation and variety of a startup

  • Recruiters, HR, operations, and other roles that typically come later in a company’s lifecycle

  • Those who want a team focused on the same area of the company, but want to be only person filling their specific function

Late stage: Settled, but still a startup

Characteristics:

  • Linear, not exponential, company growth

  • Departments with 50-100 people

  • Innovations may come through acquisitions or siloed units, while the rest of the company focuses on incremental changes

  • May be publicly traded, but is definitely financially secure

With managers of managers of managers, a clearly defined strategy, and a focus on running rather than writing the playbook, late-stage startups can closely resemble typical large companies. Each employee has a clearly defined role, and succeeds by excelling in that role rather than making other contributions.

Benefits:

  • Much more job security

  • Name recognition and networking opportunities

  • Excellent work-life balance

  • May come with hefty perks like subsidized graduate education or child care

Drawbacks:

  • More red tape and less room for experimentation

  • Hindered upward mobility

  • Less visibility into the organization

Best for:

  • Managers who exclusively focus on people wrangling and strategy rather than on-the-ground work

  • Highly specialized roles, such as security software engineers

  • Those who work well as part of a team of people filling the same function

  • People who enjoy stability, routine, and continuity

There’s no guaranteed right time to join a startup (though some argue that the worst time to join is right after the company raises funding). If you want a fast-paced, high-upside, all-consuming adrenaline rush of a job, get in as early as you can. If you want the casual air of a (relatively) new company alongside generous perks and stability, aim for later-stage companies. Either way, you’ll need to ask yourself what you value – out of life as well as work.

Anisha Sekar has written for U.S. News and Marketwatch, and her work has been cited in Time, Marketplace, CNN and more. A personal finance enthusiast, she led NerdWallet's credit and debit card business, and currently writes about everything from getting out of debt to choosing the best health insurance plan.

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