Smol companies
Tips
- A well-run startup should have 18 month of cash planned, and have a runway of 6 months to ensure you can always get acq-hired and “bail out”
Myths of Startups
- “Joining Big Tech” vs. “Starting a Startup” are not binary options
- In between these poles: joining an existing startup
Myth: “90% of startups of fail”
True statement: 90% of SMALL BUSINESSES fail. Venture backed tech startups are very different world: only 1% of small businesses are venture backed.
Roughly: 1/3 of VC backed startups “fail”
- 1/3 fail
- 1/2 return the money (nothing happens)
- 1/6 exits + drive returns
Myth (kinda): “you are under paid”
If you JOIN a startup, the small amount of compensation corresponds to betting on yourself in a similar way.
If you are negotiating your compensation, you should try to get MORE EQUITY and less cash.
Anatomy of a Startup “Fail”
Most startup failures looks like an acqui-hire. Acq-hiring results in investors
- Investors loose money
- Employees get a minor payoff