You might not get paid. Some startup employees work with the understanding that they are sacrificing a decent salary in return for receiving equity in the business. They’ll just work their tail off for a couple of years and then reap the benefits when the startup takes off.
But this assumption has two major holes: First, the startup may never succeed. If that’s the case, the equity in a failed or failing business really isn’t worth much. Second, startups are notorious for being frugal once they’re being funded. That money has to last for who know how long.
So if you take a position at a startup with the assumption that eventually the owners will feel favorably disposed to handing you a beefy salary or pay raise, you’re sadly mistaken.
Indeed you may want to second-guess your inclination to take that startup post if you’re content with your current position or have an opportunity to join a better-paying company.
You may not land a role on the executive team. A reason some individuals gravitate toward startups is the idea that it might be easier to eventually land an executive position. But how many startups have high-level executives who are not the founders?
And the promise of an executive promotion down the road could be more of a ploy to compensate for low pay. You may end up not making a lot but have an awesome title. Such titles can also be offered during the initial recruitment. Since the startup owners are being careful with their money, the titles are used as bargaining chips.
- Startups typically fail. When you join a startup, there’s a very real chance that it’s going to fail. That’s not being harsh. That’s just the nature of the beast, despite what you may have been told.
In 2012 the Wall Street Journal reported that three out of four startups fail, based on research, conducted from 2004 to 2010, examining 2,000 companies that had received at least $1 million in funding.
- You’re going to work really hard. You obviously intend to work really hard at any job you’ve lined up, but there’s something completely different about startups. You might work like a maniac for an excessive amount of hours each week because the startup is in a race to beat the clock, trying to create a product or service and establish a market before the money runs out.
If you enjoy that kind of pressure, then go for it. (Most people want to keep their heart rate and blood pressure at healthy levels.) If you’re willing to work more than 12 hours a day for little to no pay, then the startup may just be your thing.