Some Questions to Ask Before You Join a Startup

July 22, 2009

Joining a startup can be an exciting and rewarding career move, but it also comes with risks and challenges. You need to do your homework and understand what you’re signing up for. Here are 10 questions you should ask before accepting a job offer from a startup.

How much cash do you have on hand? #

This is a straightforward question that requires a clear answer. You want to know how much money the startup has in the bank, not how much it expects to raise or borrow. A promise of money is not the same as money in the bank. If the startup runs out of cash, it will go out of business.

How much do you spend per month? #

This question will help you estimate how long the startup can survive with its current cash. You can divide the answer to question 1 by the answer to question 2 to get the number of months of runway. If the answer to question 2 depends on achieving revenue targets or reducing costs, be skeptical. Revenue is hard to predict and costs are hard to cut.

What was your last valuation? #

Valuation is the value of the startup after the last round of funding. It reflects how much investors think the startup is worth. If the startup has low or no revenue or traction, and its valuation is higher than $10 million, it may have set unrealistic expectations for itself and its investors. This could make it harder to raise more money in the future or to exit at a profit.

What is your unique advantage? #

This question will help you assess the value proposition and differentiation of the startup. You want to know what the startup can do that its competitors cannot, and why customers would choose it over others. A startup that has no clear advantage or that competes on price alone is vulnerable to competition and commoditization.

What are your weaknesses? #

This question will help you gauge the honesty and self-awareness of the startup’s management. You want to know what the startup’s competitors can do that it cannot, and what challenges or threats it faces. A startup that denies or downplays its weaknesses or that blames others for its problems is delusional or dishonest. A startup that acknowledges and addresses its weaknesses is realistic and resilient.

Who are your investors? #

This question will help you learn about the credibility and reputation of the startup’s backers. You want to know if there are any well-known or reputable venture capitalists or angel investors who have invested in the startup. This could indicate that they have done their due diligence and believe in the startup’s potential. Alternatively, you may also prefer a startup that has no outside investors and that bootstraps its growth with its own revenue. This could indicate that the startup is lean and profitable.

Who are your board members? #

This question will help you understand the governance and oversight of the startup. You want to know if there are any independent or experienced board members who can provide guidance and accountability to the startup’s management. You should be wary of boards that consist only of the founders and their friends or relatives. You need at least one “adult” on board who can challenge and support the management.

Have you shipped a product before? #

This question will help you evaluate the track record and capability of the startup’s engineering team. You want to know if they have successfully delivered a product to market before, not just written code. Shipping a product requires more than just programming skills; it requires planning, testing, debugging, documenting, deploying, and maintaining code. A team that has never shipped a product before may lack these skills or underestimate their importance.

How will you market your product with no budget? #

This question will help you judge the creativity and resourcefulness of the startup’s marketing team. You want to know how they plan to attract and retain customers without spending a lot of money on advertising or promotion. A good answer would involve making a great product that sells itself, leveraging word-of-mouth and social media, or finding low-cost or free channels to reach potential customers.

What worries you most? #

This question will help you identify the main challenges and risks facing the startup. You want to know what keeps the management awake at night, and how they plan to overcome them. A bad answer would be “Nothing, we’re unstoppable” or “Everything, we’re doomed”. A good answer would be “We worry about things like cash flow, sales, engineering, support, and hiring. We hope you will join us and help us solve some of these problems.”