Robert Kneschke - stock.adobe.co
Software developers who are accustomed to working for large enterprises may feel enticed by the prospect of being part of a startup. After all, who wouldn't want to be part of creating something entirely new or even groundbreaking?
But know that startup culture can be a lot different from the corporate culture one experiences at an enterprise-level organization. Before you sign the employment contract, it's wise to weigh the pros and cons of working at a startup and determine whether it's the right working environment for you.
Startups are often less structured than large enterprises, which could appeal to those who enjoy building things from the ground up, said Kyle Elliott, a career coach based in Santa Barbara, Calif., who works with tech professionals.
"If you're someone who likes introducing systems and implementing processes and procedures, startups can be an opportunity to shine and make a real impact," he said in an email to TheServerSide.
Determine if startups are a fit for your work style
Startups tend to be less structured, which means people's jobs are often more loosely defined, said Jenny Grange, engineering manager at Prefect, a data workflow automation platform developer headquartered in Washington, D.C. A large enterprise may include numerous specialist positions; in a startup, a developer often works on several different projects or even areas of the company at a time.
To figure out if this is the right kind of work environment, ask yourself these questions:
- Am I good at self-direction?
- How strong are my prioritization skills?
- Can I identify what will help the company achieve its goals and how to drive it forward toward those goals?
- Am I willing to take on the work required to push toward these goals?
- Can I live with the likelihood of limited resources to support the pursuit of these goals?
Of these questions, flexibility and prioritization are the most important characteristics that might drive somebody toward a startup rather than a bigger company, according to Grange.
You'll also need to be willing to learn by doing, Elliott notes. For those who require a lot of direction, working at a startup as a developer may not be the right career choice. Some startups pay attention to work/life balance, but many especially those in their infancy are not a good fit for those who can't or won't put in long hours, he said.
Review the startup's employment history
Startups may be young, but every company has a history. Such information can provide insight into how they treat their employees.
For example, assess how the prospective employer handles departing employees, whether they leave voluntarily or involuntarily, Elliott suggested.
"With the recent economic downturn, review if and how the company dealt with layoffs, as developers are often some of the first to be impacted," he advised.
Devs also should examine how long employees tend to remain with the company and what their career trajectories look like, he added.
Know your compensation and benefits requirements up front
Before entering salary discussions, decide how much money you need to earn as well as the benefits you expect. Elliott encourages job seekers to break this list down into three categories: requirements, preferences and deal-breakers.
"Get clear on what you absolutely need salary-wise and what you're willing to compromise on as well as your 'walk-away number,'" he suggested.
Be sure to include the cost and value of benefits in the salary requirement calculation. Some smaller employers may not be required to provide group health insurance, for example.
"If you're targeting a budding startup that falls under this [category] and doesn't offer health benefits, you'll want to factor this cost in when determining your minimum salary," Elliott pointed out.
Beware of equity
Startups commonly include equity in an employee's overall compensation package, but its actual value relies on the company's overall success or lack thereof.
Examine the terms of the employment agreement, and look for conditions related to when employees may cash out. At vesting time, the market price for that equity may differ from the strike price, and you may find yourself paying taxes on the difference.
This is why the right to exercise early is an important negotiating consideration, Grange advised. "The ability to exercise early and exercise at the strike price that they give you is actually a massive advantage," she said.
Think about the risks and rewards of equity in a nonpublic company too. "Although private equity can look great on paper, it can be challenging to understand the actual worth of the stock when it's not trading publicly," Elliott noted.
Of course, equity is only part of the picture when considering employment with a startup (or any company). Software developers should negotiate a total compensation package that includes a solid base salary as well as good employer retirement contributions.
Contract negotiations aside, working as a developer at a startup can be fulfilling to those with an entrepreneurial spirit because they can shape the organization, Grange said. For some devs, there's value in that opportunity.
"When you're going into a startup, you are going in to help create a company," she said. "You can be very instrumental in making that company a success or not."