May 8, 2018

Working at Startups: The Good, the Bad, and the Risky


Working for a startup can offer a lot of advantages. Some startups are willing to pay higher salaries than well-established companies, while others offer fun perks and unique cultures. Roles usually have plenty of room for growth. Stock options and profit-sharing are often on the table as well.

But all the free lunches in the world don’t outweigh the risks of startup life. A startup that’s careless with its brand can leave a black mark on your resume, while one that is careless with its funding can unexpectedly fold, leaving you out in the cold.

Before accepting an offer from a startup, it is important for candidates to properly vet the company and weigh the risks against the rewards.

Look, It’s So Shiny!

It can be easy to get lured in by a startup’s roster of fun benefits — and it may very well be the case that these benefits make the opportunity worth the risk for you.

“Startups … have to offer creative perks and benefits in order to attract top talent,” says Ann King, cofounder of executive recruiting firm CVPartners, an Addison Group company. “Especially in the Bay Area — where unemployment rates remain virtually at zero — it often feels like every company is fighting for the same candidate profile, so the creative perks and benefits have become bigger and better in the fight to hire the best talent.”

Among the most common perks, King lists “gourmet snacks and meals, napping, zen rooms, regular happy hours, and subsidized parking and transportation costs.” Among larger startups, the perks tend to be more “practical,” including things like “on-site laundry, car washes, and access to doctors and dentists.”

“However, with all of these popular perks and benefits come lower base salaries and the lure of equity,” King adds.

Whether or not a company’s robust benefits package outweighs a lower salary or the risks of working at a startup ultimately falls to the candidate to decide. Before taking a leap for free sandwiches and on-site laundry, check online for reviews from current and previous employees to help you get a sense of whether the company’s perks are for show or if they actually represent the larger culture.

“While perks and benefits don’t necessarily correlate with or guarantee a startup’s success, they do tend to help companies attract the best talent,” King says. “Startups have to offer some attractive, popular perks like these when they pay people less than market value. Every situation is different, so job seekers must decide what works best for them and stay true to those values throughout the job search and interviewing processes.”

With Great Risk Comes Great Reward

For those willing to take the risk, the right startup can provide valuable experience and opportunities for tremendous growth.

“Due to the long hours and hard work startups require, they often make for great training and resume-building opportunities … particularly for those fortunate enough to be part of a success story,” King says.

Accepting a job with a startup doesn’t mean you have to commit for life, however. Part of weighing risks will be setting career goals and establishing boundaries that you aren’t willing to cross. If the startup is getting far more from you than you get from it, it’s important to know when you should cut your losses.

“That said, risk tolerance is completely up to the individual,” King says. “While startups do provide excellent experience and it’s often unclear which will become the next unicorn or dazzling IPO, it’s important to pick a company or role where you not only feel challenged, but also [have] the chance to learn from a mentor or manager that will help you grow and develop in your career. Many of us got our start by working with and learning from people we believed in. In your next role, be sure that your boss will take an interest in you and your career goals and help you grow and develop as a professional.”

Read more in Entrepreneurship

Jason McDowell holds a BS in English from the University of Wisconsin-Superior and an MFA in Creative Writing from The New School. By day, he works as a mild-mannered freelance writer and business journalist. By night, he spends time with his wife and dogs, writes novels and short stories, and tries in vain to catch up on all of those superhero television shows.