Looking to Join a Startup? Make Sure You Ask These Questions

I spend most of my day talking to potential employees for my new startup and to my own team. Having seen multiple ups and downs of the tech world for the last 25 years, both in the Silicon Valley and in India, I continue to see very smart people make one simple mistake - not asking common sense questions.

All startup founders, both in India and the Silicon Valley are realising that the endless venture-funding pipe has dried up. We were in a bubble. Whether we are in a "correction" right now or "crash" will only be judged after it is all over. Most tech companies in the world, small or large, are taking a beating. There is less money to go around and you're going to be affected too.

Having said that, this is a great time to be in a startup. With all the noise and fizz going out, some really good companies will be created now. If you are in one of these, you'll not only end up very wealthy with your stock options but also do high quality work.

Here is what you should do as an employee before joining a startup, and even while working for one:

1. Ask questions. Discreetly. Go to the CEO and ask him how the company finances are. If he acts defensive or evasive, this is a red flag. Talk to the founders. See if they're cohesive and saying the same thing.
2. You are one of those super-high paid engineers, hold off on buying the fancy car that will stretch your finances. Don't assume your next pay-check will be as big as your last. Be prepared to simplify your life. I bet you were not wallowing in luxury 3 years ago and your life was not miserable back then. You will re-adjust if needed.
3. Don't overcompensate and go to the other extreme. Just because your last startup is out of money, it doesn't mean all startups are dead and you should be punching your time card at a large services or MNCs for the rest of your life.
4. If you enjoy freedom, creativity and a lot of ownership, you ARE startup material. Just look around, there are some great startups run by seasoned entrepreneurs, with tons of cash who are looking for talent.
5. While your family is critical and you need their full support, don't take advice from them. This is a brand new world and no matter how well meaning and smart they are, they will not be able to relate to you and give you the right guidance.
6. Do find a good mentor. Preferably one of them from the startup world, who can give you balanced advice.

And here are the three key questions you should ask the founders:

1. What is the vision for this company? Where, if things go well, do you expect the company to be in 1 year? 2 years? 5 years?
2. What is the financial state of the company? How much money do we make (or will make)? How much "runway" do we have?
3. What will I be doing now and what can I grow into in this time frame? Is that exciting?

You should not expect perfect answers to these questions, there are none. Instead, make sure you get authentic answers. At the end of the day, it is all about trust. In both successful and failed startups, the worst emotion I've seen in very hard-working people is the sense of betrayal and you really want to avoid that.

If you enjoyed the boom, good for you! But be prepared to ride out the bust. This too shall pass. Smartphones, Cloud and Social Media are all game-changers and the new world order will have some great companies who will create serious wealth for investors, employees, and entrepreneurs!

Bala Parthasarathy is a serial entrepreneur working currently on a stealth-mode startup and was previously associated with AngelPrime (now Prime Venture Partners).