← Back to Blog

Should you Join a Startup?

The pros and cons of choosing to work at a startup

The startup you’re joining could be the next Facebook, or it could be the next ScaleFactor. Unfortunately, it isn’t easy to estimate the likelihood of a company succeeding, especially when it’s in an early stage of development.

The decision to take a job at an established company or to join a startup is often tricky. Here’s what you should know when you’re deciding whether to join a startup or not.

Pros of Working at a Startup

Increased job responsibility

The responsibility you are given will vary depending on the startup, but chances are you’ll be given more responsibility than if you were at a traditional company. Fewer employees mean more versatility.

Possibility for promotion

Getting into a company during the beginning of its development can help you rise in the ranks faster. The company will most likely value employees that have stuck with them since the beginning.

Stock options

Many startups offer their employees the opportunity to buy stock at a set cost. If the company goes public and stock rises, this can be incredibly profitable. Usually, startups offer this to make up for a lower salary. It’s a risk that has paid off in the millions. This template can help you understand the value of your compensation package.

Passionate Team

For the most part, employees at startups are passionate about their products or service. They’re willing to put in the long hours and accept lower pay because they believe in what they’re doing. Working around a group of people who genuinely enjoy their job makes going to perform an easier task.

Learning opportunities

You’re growing with the company. This means you’ll be privy to more details and learning lessons than if you were an employee with an already established company. If you want to start a company of your own one day, this experience could be extremely helpful.

Cons of Working at A Startup

Lower Pay

Depending on the funding the company has received, your salary will differ. However, the pay is probably not as competitive as Google, which pays their employees an average base salary of $119,000 a year.

Instability

20% of new companies fail within a year. Your stock options won’t mean much if your company doesn’t become successful. You may also be left without a job should your startup close its doors. While this is not always the case, companies tend to look higher on a Twitter or Facebook position on your resume than that of a closed startup.

Lack of Guidance

With increased responsibility comes a lack of guidance. At a startup, everyone is taking on a lot of work, which means there may not be a structure for training new employees. Some people thrive in that fast-paced learning environment, while others feel lost.

Lack of knowledge about the company

You aren’t likely to find too much about this company on Glassdoor. It’s a relative unknown, which means that you won’t learn about the work culture or management until you’re already employed. One bad manager can ruin a working experience, but it’s a risk you may have to take.

Long working hours

Startups are known for a lack of work-life balance. More challenges come with cultivating a successful company rather than maintaining a company. This means you could find yourself in the office long past 5 p.m.

Lack of benefits

Similar to salary, benefits are better in a more established company. That being said, startups often have creative benefits to make up for this.

Questions to Ask

What phase is the startup in?

Not all startups are in the same phase. Some are in the seed phase, others have received Series A or B funding and are plush for cash.

When deciding whether to take a job at a startup, where they are in development is a crucial factor to consider. Startups that are more developed may offer you a higher salary, a more stable working environment, and less risk. That being said, getting into a company in the seed stage is often more lucrative.

What are my priorities as an employee?

If you have debt and are looking for a steady job that pays the bills, joining a startup may not be the best option.

If your priority is receiving promotions and being given responsibilities, a startup can provide that.

Do you believe in the company?

Everyone wants to be passionate about their work, but with startups, this is especially important. Long hours, a lack of guidance, and unstable working conditions are a lot easier to handle when you love what you do.

Causal can Help

Use Causal to make informed decisions about your personal finances. This template will help you see the monetary benefits and consequences of joining a startup or an established company like Google. Our templates offer clean and clear models that show a range of options. Life isn’t predictable, but knowing all of the possible scenarios can take the guessing out of your job choice.

Build your own financial models for free

Thanks! We'll be in touch soon.
Oops! Something went wrong while submitting the form.