By Fortune Editors
February 7, 2011

Discussions about startups often focus on founders or investors, but most people in the startup game are regular employees. So how do you find a startup job?

By David Beisel, contributor

“I want to work for a startup.” It’s a common statement, but a “startup” can be very different things. The primary dimension on which startups differ is stage: Two guys in a garage is definitely a startup. So is a 30-person company growing with a second round of financing, and so is a 250-person company preparing for an IPO.

The first decision, and the most critical decision, of what type of startup to join is based on the current stage of the company. This selection is the most personal and subjective one, as it’s based on a person’s motivations for why they want to be a part of a startup in the first place (as opposed to just getting a job at xyz company) — desire to make an impact, better working in smaller teams, excitement to be involved with cutting-edge technology, aspirations of becoming a founder and/or a startup CEO, working with other motivated people, long-term financial upside, etc. But this juncture is also where I see people make a critical mistake.

The biggest mistake I see is people going to Series A or B funded startups because they perceive it as “safe” with VC backing, but the only thing *temporarily* derisked is financing. And that derisking is only for 12+/-6 months. Yet the company hasn’t figured out its product-market fit, hasn’t figured out its customer proposition, doesn’t have revenue… it doesn’t have traction.

As an employee joining, you bear (nearly) all the risk as the founders but an order of magnitude less in compensation, recognition, and influence.

I believe that there are three opportune times to join a startup:

  1. As early as possible (or as early as you can stomach).
  2. When the train has already left the station.
  3. When there is a truly unique ability to learn, collaborate with specific people, or work in a special situation.

As early as you can stomach. For some, the proverbial two-guys-in-a-garage-stage is the ultimate allure… but they’re not ready just yet to be one of those couple founders. Push yourself hard to ask why am I not a founder now? If the reason is the need for an initial idea, a specific skillset, time to develop a potential customer network, etc., then the right answer is to find a role and company which fits that description so that after a few short years you’re ready… usually that’s not a seed-stage startup. If the reason is that you haven’t done it before but just want to learn the playbook, then by all means joining an extremely embryonic team is the right next step. Of course many people have current income requirements that the earliest-stage team can’t satisfy; hence, reality does dictate that this rule is amended from “as early as possible” to as “early as you can stomach.”

But if you’re stomach feels queasy reading any of the above, it really makes sense to jump ahead to a much later stage startup where the…

Train has left the station. What I mean is that the startup is already on track, generating real revenue, rapidly growing (and hiring), and is clearly destined to be some type of success. It’s unclear if it’s going to be either a “win” or a “monster win,” but a reasonable outcome is reasonably assured. In other words, the train has left the station heading towards a destination and will get there if you’re on board or not. Of course you’re going to make an impact (that’s one reason why you’re joining a startup after all), but the company is already moving forward with its own inertia.

If you aren’t ready to be a founder soon, this point is the best place to join a startup. Yes, it’s larger and doesn’t have the same feel as “those early days,” but the benefits of joining this profile company are numerous:

  1. Learning – you’ll be in the pole position to see how a successful startup ticks.
  2. Reasonable exit in a visible time-horizon with some financial payoff– With an outcome probable, there’s a likelihood of a nice payday (though certainly not a life-changing one).
  3. Instant association with success – Unless you’re a founder, people rarely remember when in its lifecycle you joined a company… just that you were there. If this company is already perceived as a success – bing! – now so are you.
  4. Startup credibility – You’ll earn startup credibility chops even though you weren’t there from the beginning.
  5. After successful exit people will leave to start own startup – Post-exit is most often when the magic of new company formation happens. Employees take their newly-created financial assets, their domain credibility, and their uniquely acquired knowledge to start new companies. This is the perfect time to have a unique opportunity.

Even though it is a smart strategy to join later in the game, realize that you miss out on acquiring some startup founder skills (searching for a repeatable model, the emotional roller coaster, etc.). But if a founding role isn’t your plan, there are some people who are just better suited to the scaling-stage of a startup — and that’s a great thing. These are people who are probably never going to be founders, but make great VPs of engineering and marketing, etc for late-stage companies… and they do it successfully again and again.

Learn and work with people or in a special situation. Going extremely early or very late is the right approach 90% of the time. The exception to the rule is just that — when there is an exceptional opportunity at the in-between. There are situations where you have opportunity to work with someone renowned in industry. Or you have a special skillset that would apply to your role.

The last reason to join a mid-stage startup, and the most compelling one, is that given your prior experience you have a unique perspective to recognize that the company has been or will be de-risked in some way that hasn’t fully been realized yet. It’s easy to craft a story to cite one of the above cases is present, but the true test is convincing yourself that it’s true.

Regardless of what stage startup you join, the choice should be just that –something which you chose, a deliberate selection based on criteria that you’re optimizing around and the potential of upside, not a perception about safety. You should be joining a startup because of your excitement about the role or situation, the company itself and the opportunities ahead with the chance to change the world, not as a hedging strategy.

David Beisel is a venture capitalist focused on the digital media space. He currently serves as a co-founding partner at NextView Ventures, and previously worked with both Venrock and Masthead Venture Partners. This post originally appeared on his blog, where it’s the first of a 4-part series.

SPONSORED FINANCIAL CONTENT

You May Like

EDIT POST