I‘ve been fortunate to work with or for a few different startups over the past five years, and I’ve learned many lessons. Every startup I’ve worked for was in the education field. However, I believe you can learn a lot from these five major lessons regardless of the type of business you choose.
If you’re thinking about joining a business that is just getting off the ground, here are the top five things I’ve learned over the past five years. These tips can help you make an informed decision if you’re coming in as a co-founder, consultant or employee.
At any business or organization, culture fit is critical. Whether you’re part of a founding team or an aspiring employee, make sure you understand and feel compatible with the culture of the organization. Every startup has a rhythm and flow, different expectations, and a way in which the team works.
When you join a startup, you’ll most likely work closely with a small group of people. Because you are working hard to get a product or service off the ground, your work relationships can become an essential part of your life, almost like family.
If you are not excited about the startup’s mission, you can quickly lose interest, which can lead to a loss in productivity, innovation, and revenue.
Before you join a startup, ask about the culture and make sure it sounds like something you’d enjoy taking part in on a daily basis. Understand the expectations of your role up-front. You don’t want to be surprised six months down the road after you’ve invested your precious time and energy.
Many positive effects can come out of being more transparent, especially when a tight-knit group of people work together for endless hours.
Since startups are typically small when they launch, if you’re highly involved in the day-to-day activities, transparency in any small business or organization leads to trust. If a startup offers you equity, or if the company wants you to work in an executive role, transparency is critical. Many positive effects can come out of being more transparent, especially when a tight-knit group of people work together for endless hours. If you don’t feel the founders are open with you, or if your instinct tells you otherwise, you can begin to resent the company for holding secrets. And, this lack of trust can lead to personal high levels of stress–leaving you to wonder about your job status, payroll, finances, and your future. When you work at a startup and you are involved in every aspect of the company, trust and transparency are essential to finding success.
Know your financial situation well–what you can and cannot do without.
In entrepreneurship, you may find a startup is bootstrapping its way without outside investors. Bootstrapping is a situation in which the founder or founders start a company with little capital, use their personal finances, or fund the company from other revenue outlets. There could be times when payroll is late. Some small businesses choose to avoid outside funding while building out of their own pockets. And, behind the scenes, this buildup can take years.
You can take a financial risk when you work at a startup-especially when the founders are trying to make it on their own. You may have to sacrifice time, money, and energy in the short-term. Be sure to watch for red flags. If a startup is not honest about any financial problems they’re having, you can be put in an uncomfortable situation.
Before taking any role, it’s okay to ask if the company has the funding to pay you on time. You can also ask how the company is run from a financial standpoint. If a startup begins to lack funds and they don’t give you prior warning, take note immediately and reflect on your personal financial situation.
Move forward only if you are comfortable, and pay attention to your instinct. If something feels wrong, you’re most likely correct.
Contracts, Ownership, and Equity
If a startup offers you ownership or equity, make sure you understand the offer. This knowledge boils down to understanding the percentage of equity, the type of shares they offer you, and the potential to cash out when the time is right. If you are with a startup that is in a hurry to exit, you may have chosen the wrong place to work. There are different kinds of shares at startups, and some of those will never convert unless the company goes public.
If a startup offers you a contract with equity, and you don’t understand the terms or verbiage, sit down with someone who can explain it to you in layman’s terms. This person can be a startup attorney, a business coach or anyone you can trust that understands the wording in an offer. Comprehending an offer from a startup can be confusing, especially if you are new to this world. It is essential to grasp any fine print or translate fancy terminology you may not understand.
Most people who work at startups have a ton on their plate, especially if the founders are launching the business with their personal capital. Quite often, things can happen with little or no notice, and you may have to pivot a strategy, work a bit quicker, or hop on a call at rare hours of the day or night. Sometimes, things run slow and then all of a sudden, they need you for a host of different services.
Before joining a startup, make sure their schedule falls in line with your personal needs. Flexibility typically ties in with the culture of the startup and is a critical piece you should know about before you join.
How, when, and where you work are all part of flexibility needs as well as the culture. With technology, we can live in a 24/7-work world–and that is not healthy for you, your colleagues, or the company’s bottom line. You can find the life of an entrepreneur is like a roller coaster, and that means you can quickly become part of that ride.
Before you join any startup, make sure your vision, lifestyle, and passion align with the company’s goals. Find out as much as you can upfront. Taking part in an entrepreneurial environment is not for the faint of heart. Make sure the working environment is a fit for you and your lifestyle.
Editor’s Note: This article originally appeared on Forbes and is featured here with Author permission.