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These are the questions (and reasons for them) that I have used in the past: https://joewegner.com/blog/startup-interview-questions https://joewegner.com/blog/s
by josephwegner 8y ago
These are the questions (and reasons for them) that I have used in the past: https://joewegner.com/blog/startup-interview-questions https://joewegner.com/blog/startup-interview-questions
- ChuckMcM 8y agoThese are perfect. I especially like the cost center question. It is always a red flag if the CEO doesn't have a handle on where the costs are!
- jacklewis 8y agoCan you please clarify why you say "equity is worth at most $0"? If the company is successful surely the equity is worth something.
- raptorraver 8y agoEquity isn’t money, it’s a lottery ticket.
- maximilianroos 8y agoLottery tickets are worth more than $0
- emilecantin 8y agoYes, but not much more. E.g: I can go right now get a ticket for a $50M prize for 5$. How much do you pay for equity (in the form of reduced salary), and what's the expected upside?
- learnstats2 8y agoAnd I would value that lottery ticket at about $1 today - with the understanding that: a) the face value is over-stated by around 100%, and b) I have no hope of riding out the variance, so the gamble is a poor one for me.
- patrickthebold 8y agoSome are. Most aren't.
- josephwegner 8y agoYou are absolutely correct, if the company is successful, equity might be worth quite a bit. It's unlikely that you will choose a startup that will be successful in a way that makes equity valuable. Venture Capitalists are in the business of making money off successful startups. They work day in and day out on finding startups that are likely to be successful and investing in ways to help them be successful. Most of the time, they're wrong. The only way that VCs are able to be profitable is by having a diverse portfolio of companies in the hope that one is successful enough to outweigh the losses of the others. Picking out successful startups is (probably) not your expertise, and you only get about a dozen chances (on the high end?) to choose a new employer for the duration of your career. The odds are very very against you. Given those odds, we can value startup equity at approximately $0, perhaps a bit higher. Unfortunately, most startups offer lower salaries in trade for equity. They also are offering you _options_ instead of actual shares. Unless you stick around long enough for a liquidity event that guarantees the option's value, you will have to exercise those options prior to knowing their true value. This costs you money _twice_ for an entity that has a near-$0 value.
- paulsutter 8y agoThis question reflects a misunderstanding of a startup’s mission (to grow extra-ordinarily fast) > What cost center would have to be cut to be profitable today?
- sambe 8y agoIt doesn't seem to reflect any misunderstanding at all to me. Did you read the following explanation? For example, reducing ad spend for growth was considered a possibly good answer.
- hitekker 8y agoHey, your list is great and has solid BS-free explanations. One thing I learned from it, is that how insightful a question is essentially how well it circumvents bias. You can ask something typical and get canned responses, but posing an inquiry designed to elude defense mechanisms, and penetrate an semiconscious, semi-intentional haze will probably (and inadvertently) yield the most revealing answers.