There is a certain energy about startup companies that can be very alluring to marketing execs. The opportunity to build something and grab a piece of the action is compelling. But don’t let the excitement and potential cloud your decision-making process when considering a startup employment offer from a startup.
When you evaluate an opportunity with a startup, approach it the same way you would as if you were a financial investor in the company.
The Basics of Negotiating Your Startup Employment Offer
On top of understanding the fundamental business offering and the SWOT analysis, here are some of the key things to know and ask as you work through your startup employment offer.
- Who is driving the business and have they been successful with other startups?
- Do they have users (users = customers that aren’t being charged to use the product/service)?
- Do they have customers? Aka, revenue.
- How long have they been in business?
- How much have the founders invested personally?
- Who else has invested in the business and how much?
As a marketer, beginning your startup employment at the right time is critical.
- Come on board before they have users, and your job of creating customers will be a steep climb.
- Come on board before they have customers and your compensation and the startups commitment to a marketing budget is a 100% drain on capital. Be clear about expectations, resources, and timeline.
- Come on board after they have paying customers, and the table will be set for you. Go get ‘em!
If you get through the evaluation process and you begin to discuss the startup employment offer, revert back to negotiating like an investor. The components of an offer vary from one company to the next depending on where the company is in its life cycle but here are the key components.
- Base Salary
- Benefits
- Perks
- Shares or Options
- How many?
- When do they vest?
- When do they get paid out?
- Language around an “Event”?
- How many?
The first three you’ve negotiated before. Shares will work differently. You may have been able to negotiate a larger up-front grant but usually large companies have a formula for how shares are granted, when they vest, and it’s not up for negotiation. In a startup employment offer, it’s all negotiable!
Focusing on the last item listed–Language around an “Event.” An “Event” is generally defined as an acquisition, sale, or fundamental change in ownership. The industry standard is for any granted shares, vested or not, to fully vest at the time of an “Event.” Over the past few months, I’ve spoken with executives who have been negotiating startup employment offers where this has not been the norm. Keep an eye out and call their bluff if this is used as a negotiating tactic–it shouldn’t hold any weight.
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