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I've had experience hiring employee #1 and my wife's had experience being employee #1 at other companies. At that stage the founders should be comfortable talk

I've had experience hiring employee #1 and my wife's had experience being employee #1 at other companies. At that stage the founders should be comfortable talking about cash on hand and burn rate with you, so while insolvency is a risk, you'll at least see it coming. Confirm that they're open about this before joining. I wouldn't join any startup as employee #1 unless they were totally open with me about cash on hand, burn, and equity. In my opinion, the biggest risks at a company that small are a) the founders not getting along and you feeling like a kid caught in a messy divorce, b) pivots transforming your job or your product into something you're not interested in, and c) soul-crushing workload transforming you into a burnout case. But those are hard to detect in advance. The one thing you can detect in advance is whether, administratively, they've got their act together - formal offer letter, assignment of intellectual property paperwork, copy of the options plan, etc. Don't ever enter an employment situation where you're starting now but formalizing the paperwork later, when they can afford to spend money on a proper lawyer. That's amateur hour and you'll get burnt.

gawker 15y ago
Thanks! At this stage of the game, I've heard great things from the founders and they have had a successful exit before. I was planning on meeting up with them anyway even I've decided not to be employee #1 for now. Is it fair to ask about their exit strategy and their plans for growth? Also, is it fair to make the assumption that employee #1 would be required to put in long hours (soul-crushing or otherwise)?
- gyardley 15y ago
  It's fair to ask about their exit strategy and plans for growth, to get a sense of how they're thinking about their company. At this stage I wouldn't expect their plans to have much more than a tenuous connection with what will actually happen, of course. You're learning more about them than you are about the future of your company. It's a really good sign that the founders have successfully done this before, as long as they're continuing to build on and play to their strengths. If the founders' first startup was in a field they knew intimately (accountants building accounting software, say), but now they want to get into something completely unrelated (say, 3D printing), in my opinion that's a bit of warning sign. Previously successful people are susceptible to hubris - 'I did x, so I can do anything!' Often false. Still better than completely inexperienced founders, I think, but by choosing something they know nothing about they're canceling out a lot of their advantage. Yes, people at startups generally work long hours - that's a fair assumption. But there's a dividing line between long and soul-crushing that varies from person to person.

gawker 15y ago

Thanks! At this stage of the game, I've heard great things from the founders and they have had a successful exit before. I was planning on meeting up with them anyway even I've decided not to be employee #1 for now. Is it fair to ask about their exit strategy and their plans for growth? Also, is it fair to make the assumption that employee #1 would be required to put in long hours (soul-crushing or otherwise)?

gyardley 15y ago
It's fair to ask about their exit strategy and plans for growth, to get a sense of how they're thinking about their company. At this stage I wouldn't expect their plans to have much more than a tenuous connection with what will actually happen, of course. You're learning more about them than you are about the future of your company. It's a really good sign that the founders have successfully done this before, as long as they're continuing to build on and play to their strengths. If the founders' first startup was in a field they knew intimately (accountants building accounting software, say), but now they want to get into something completely unrelated (say, 3D printing), in my opinion that's a bit of warning sign. Previously successful people are susceptible to hubris - 'I did x, so I can do anything!' Often false. Still better than completely inexperienced founders, I think, but by choosing something they know nothing about they're canceling out a lot of their advantage. Yes, people at startups generally work long hours - that's a fair assumption. But there's a dividing line between long and soul-crushing that varies from person to person.