20 Questions to Ask an Entrepreneur Before Joining Their Startup
I’ve had three jobs with startups where my ultimate interview was directly with the founders. Obviously, that doesn’t make me the most experienced startup employee ever, but there are a few things I wish I knew on those first few interviews that I know to ask now.
Looking for a new job can be a terrifying and exciting experience. With a small company, you’re likely in for a steep learning curve and there might not be many Glassdoor reviews or other employees to ask about the company.
If you’re considering joining a startup, there are some things you need to carefully consider. Startups are different from established companies in many ways. They rarely have a “standard” way of onboarding people, they might not have an HR person on staff, and the compensation may be partially in stock or options.
Based on my 10+ years of experience working at early-stage startups and now starting my own, I’d like to share what I would ask an entrepreneur before joining their company.
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Advantages of Working at a Startup
While startups might seem intimidating, they tend to be progressive in the incentives they offer for early employees who are willing to accept the challenge (and risk). Ultimately, you’ll learn to be adaptable, drive results, and if the company grows, you’ll likely get promoted quickly.
On the other hand, you’ll have to wear a lot of hats. Early employees often juggle responsibilities that span many different departments in larger companies. According to Harvard Business School senior lecturer Jeffrey Bussgang, having loosely-defined roles enables small teams to get more done and try more things while they find their place in the market. This can be interesting, but also challenging when you try to translate your startup experience to a big company.
Startups also tend to build a unique culture of passionate people who really care about their jobs. Often, they offer flexible working hours, creative office amenities, and a relatively casual work environment.
Finally, startups offer many opportunities for innovating and showcasing your potential. Your contributions will be more evident (relative to working for a large corporation), but your failures will also have more visibility.
Red Flags to Watch Out For
This article is about the questions you should ask an entrepreneur before joining their business, so while asking about some of the perks is a good idea, you also have to ask about the challenges they face. Look for transparency in each of these areas and dig into anything that smells off. There could be red flags buried beneath the surface!
Lack of Focus
Startups are all a little bit chaotic, as they’re not as mature as large businesses, but they should have a clear mission and focus. A total lack of structure and systems can lead to organizational chaos, which, in turn, paves the way for failure.
Financial Issues
Financing, or access to capital, is perhaps the biggest challenge encountered by entrepreneurs. Ask founders about their runway and plans for funding the business in coming years.
Mismanagement
Mismanagement is rampant among startups because the kind of people who start businesses are not necessarily the kinds of people who should manage teams. In 2019 alone, 82% of startups failed because of bad management. Poor leadership can compromise performance and can make the organization a terrible place to work.
Those may be the big three, but there are plenty of other smaller red flags to watch out for. Some on my list include:
- High employee turnover rates
- Lack of objectivity
- Unclear or unrealistic expectations
- Lack of diversity
- Poor self-awareness
- Lack of balance
20 Questions to Ask an Entrepreneur Before Joining a Startup
Now, let’s get on to the questions you should ask an entrepreneur before joining their company.
Interviews should never be one-sided. The founder is vetting you, but you should also be vetting the founder and their business. Use this time to ask the entrepreneur probing questions to understand their outlook, their work ethic, and the role at hand.
These questions cover a broad range of important points, from the company identity and its long-term viability to career advancement and company culture. I’m sure you’ll come up with your own questions to add as you gain experience working with small businesses, but this should give you a strong starting point.
1. What significant challenges have you faced when working on this startup?
One way to learn more about the organization and the founder is to ask how they handled challenges. Did they work 20-hour shifts to pull off a miracle? Did they fire half the team? Did they raise more money? Did they hire others to help them?
Knowing how challenges were resolved can provide you with significant insights about the company and its leader. You can also ask about the current challenges that the startup is facing because you want to see an entrepreneur who is able to identify and discuss these vulnerabilities.
2. What do you do when you get swamped with work?
I look for founders who work smart, not hard.
This ties in closely with the challenges question, but I also like to know personally how the founder values their time. I’ve met way too many founders who let themselves get bogged down with menial tasks instead of focusing, delegating, and deleting work that wasn’t worth it.
3. Throughout your startup journey, what insights have you gained or discovered?
There’s no right or wrong answer to this question, but how they answer it can help you define the founder’s perception, self-awareness, philosophy, and open mindedness.
If a founder is 6+ months into running a company and they haven’t learned much yet, that’s a bad sign.
4. What motivated you to start this company?
It’s exciting to learn more about how the organization got started and what pushed the entrepreneur to launch their company in the first place. Some companies have strong mission-first motivations, while others are more opportunistic or financially motivated.
5. What keeps you motivated now?
Motivations change. I know that my motivators in the first three months of running my company were far different than they are now.
Early on, founders are often propelled by excitement and mission, while later on, founders might be more motivated by their people and doing good work for customers.
6. Tell me about a failure you’ve had previous to this business?
This is another question that would call for an entrepreneur’s openness. What you’d want to get from their answers are two things: honesty and introspection. Note how they used past mistakes to learn and grow.
7. When was the last time an employee gave you negative feedback? How did you respond?
Is the founder the kind of leader who can take negative feedback and use it as constructively? Their response would say a lot about their leadership style.
8. What are your organization’s core values?
While values can be cheesy when done poorly, they’re immensely valuable when done well. Entrepreneurs who think about their values are more likely working to improve and live up to them.
9. How are these values reflected within the organization?
It’s one thing to establish solid core values, but it’s another to live them. How do these principles affect decision-making and operations? Ask for specific examples.
10. Do you value collaboration and are you open to collaborating across verticals?
Collaborations can enable any endeavor thrive. Find out how teams usually collaborate and how open they are to sharing and working together on ideas.
11. How close to product-market fit are you?
Product-market fit is a journey, but founders should be able to describe where they are on that journey.
Understanding how strongly your product resonates with customers is a huge part of entrepreneurial awareness.
12. What is the organization’s growth rate?
The rate of the organization’s growth has an impact on its revenue growth, but it also changes the pace at which it will hire. High growth startups will offer faster promotional tracks and the chance to be an early part of a larger team, but they’re typically more demanding.
13. Does this role offer the opportunity for growth or progression?
Many startups suffer from an “overly flat structures,” which make it difficult for employees to advance. You need to understand the entrepreneur’s mindset on hierarchy and see if it fits with your own.
14. Do you work remotely or in the office?
Flexibility is important to a lot of employees, especially those who might be leaving a job that’s recently gone back to in-person work. Most startups won’t have a defined policy, but if the founder is still in the office every day, the culture likely demands that you do the same.
15. Tell me about the industry’s potential?
If you don’t already know the industry, make sure the entrepreneur you’re speaking with does. They should know the size of the market, growth rate, and major competitors like the back of their hand.
16. What do you do to inspire or motivate your employees?
Great entrepreneurs can inspire people to join them, but it’s not just about pay. Ask how they inspire or motivate people, how often they meet with everyone, and how “bought in” the team is today.
17. Tell me about your current processes?
As mentioned above, one of the red flags you’re trying to filter for is organization and focus. Good entrepreneurs can inspire and coordinate large teams of people behind their cause. I’m a highly-process driven person, so I know I won’t get along with an entrepreneur who doesn’t have one.
18. What does the future of this role look like?
Entrepreneurs should have a vision for the role today and how it might progress in the future.
19. What is this role’s cash salary and equity component? What is the equity portion worth and how many shares are outstanding?
You should know how much you can earn from working for a startup, but it’s a little more complicated than other businesses. Understanding the value of your stock and options is notoriously difficult, so it’s important that you ask as many questions as you can about this. Ignore equity-only offers unless the founder is offering to make you a co-founder.
20. What other benefits do you offer now? What’s the timeline for other benefits?
Don’t take health insurance, 401(k), or other benefits as a given at a startup. Many small companies put these benefits off as long as possible to save money, but they might offer some lower-cost alternatives if you ask. Finally, ask about the timeline for medical benefits, retirement plans, etc. If the founder has plans to offer them in the future, that’s a good sign.
Final Thoughts
Joining a startup is an exciting prospect filled with opportunities for career advancement and personal growth. But like any job hunt, it’s important to exercise caution and understand who you’re working with before you commit.
This doesn’t mean that you’d need to adopt a cynical worldview with regard to startups. Far from it! Be open to embracing risks and stay optimistic. After all, while working for startups can be a roller coaster of experiences and emotions, I’ve found it to be a very rewarding adventure.