Making an Informed Bet

In Part 1, I talked about why startups are seductive—and the sobering statistics that most job seekers don't hear. In Part 2, I covered how to decode startup job postings and spot the red flags.

Now let's talk about what to do if you've decided you might actually want to take the leap.

Because here's the thing: I'm not anti-startup. I've started multiple businesses myself. Some of the most meaningful work I've done has been in early-stage environments. The energy, the creativity, the sense of building something from nothing—it's real, and it can be worth pursuing.

But it needs to be an informed bet. Not a leap of faith based on someone's pitch deck.

The Power Dynamic Shift

Here's something most people don't realize: when salary is off the table (or significantly reduced), the power dynamic shifts in your favor.

At a traditional job, the employer holds most of the cards. They're offering something you need (income), and there are usually plenty of other candidates who want it too.

At an early-stage startup—especially one that can't pay market rate—the equation is different. They need you more than you need them. Your skills, your time, your willingness to take risk—these are valuable. Maybe more valuable than whatever equity percentage they're offering.

Not with arrogance. But with the clear understanding that you're considering betting a significant portion of your career on their vision. That's not something to do lightly, and any startup worth working for will respect you for taking it seriously.

Questions to Ask Before You Commit

Here's what I'd want to know before betting my time on someone else's startup. These come from my own experience interviewing for founder-level roles—the questions I wish I'd asked sooner, and the red flags I've learned to spot.

About the founders and their experience

First, does this person have deep domain experience? There's a big difference between someone who's been a consumer of something and someone who's actually worked in the industry they're trying to disrupt.

A consumer sees a problem and thinks "someone should fix this." A domain expert knows why it hasn't been fixed yet—the regulatory hurdles, the entrenched competitors, the unit economics that don't work, the reasons previous attempts failed.

This isn't necessarily a deal killer. Consumer-founders can succeed. But if they've never actually worked in this space, expect a longer, harder path to product-market fit. They'll have to learn things that domain experts already know.

Beyond domain expertise: have they done this before? Do they have a track record of taking something from zero to one? Or even from one to one hundred? You are hitching your wagon to this person or these people. A first-time founder can absolutely be successful—but the odds fall off a cliff compared to someone who's been through the process before.

About how real this actually is

Here's the uncomfortable question: how much of this is just an idea, and how much is real?

• Have they validated the product at all? Do they have an MVP? Have they tested it with real users? What did they learn?
• Have they talked to actual customers? Not friends who said "that sounds cool"—actual potential customers who might pay money?
• Have they structured the company properly? If they're offering equity but they're still an LLC—or worse, a sole proprietorship—that's a major problem. Equity in an LLC works completely differently than stock options in a C-corp. Have they actually done the legal work to be able to offer what they're offering?

About the money—specifically

If they're offering compensation based on future funding, where exactly are they in that process?

• Are they "meeting with investors" or have they actually gotten a yes?
• If the money is supposed to come from grants, have they ever written and been awarded a grant before? Grant writing is a skill. Expecting to fund your startup with grants you've never applied for is magical thinking.
• If they've raised money, from whom? How much? When does it run out?
• If they haven't raised money, what's the realistic timeline? What happens to you if the funding doesn't come through?

The further away someone is from actually having money—or a proven track record of getting money—the more risk you're taking.

About whether they're ready for you

This is something first-time founders often don't think about: are they actually ready to have an employee?

If you're employee number one, have they built the infrastructure to support an employee? Payroll systems? Legal structures? Management processes? Or are you going to be figuring all of that out while also trying to do your actual job?

If you're employee number ten, do they have the organizational maturity for a team of ten? Or is it still chaos from when they were three people, just with more bodies?

About what you'll actually be doing

This is where a lot of startup job postings fall apart under scrutiny.

Does the job actually define what you'll be doing? Not the aspirational mission statement—the actual work, day to day?

And critically: does it sound like one person could actually do this?

I've seen postings that want one person to do marketing, and sales, and product development, and customer support, and "oh by the way you're our IT admin too." That's not a job description. That's a founder who's trying to fill all their own gaps by hiring one person.

Does this look like a professional organization? Has the role been planned and designed? Or is it just a wish list of everything the founder doesn't want to do?

What does success look like in six months? A year? Who will you report to? How are decisions made? What's the expectation around hours and work-life balance?

How they respond to these questions matters

Good founders will welcome these questions. They'll have thought about these things. They'll appreciate someone who takes the decision seriously—because they want employees who are making informed bets, not naive leaps.

Bad founders will get defensive, give vague answers, or try to redirect you to the vision and the upside. "We'll figure that out as we go" might sound flexible, but it often means "I haven't thought about it."

Pay attention to how they respond. It tells you a lot about how they'll operate once you're inside.

Due Diligence You Should Actually Do

Beyond asking questions, here's how to verify what you're being told:

Research the founders. LinkedIn, previous companies, press coverage, Glassdoor reviews of their past ventures. Look for patterns. Did their last company implode? Did employees have good things to say?

Talk to former employees if you can. This is harder to do but incredibly valuable. People who've already worked there know things that won't show up in an interview.

Understand the competitive landscape. Is this a crowded space? Are there well-funded competitors? Is there something genuinely differentiated about this approach?

Look at the product. If there's something to see, use it. Does it work? Does it solve a real problem? Would you use it if you weren't considering working there?

Verify the funding claims. If they say they've raised money, ask from whom. Legitimate funding is verifiable. "We're in talks" is not the same as "we've closed."

Talk to customers if possible. If they claim to have customers, ask to talk to one. Real customers who are paying money are the strongest signal that something is working.

When a Startup Is Worth the Risk

After all the warnings in this series, let me be clear about when I think a startup opportunity is worth considering:

When the learning is extraordinary. If you'll be doing things you couldn't do anywhere else—building skills, tackling problems, working with people who will stretch you—that has real value even if the company fails.

When you believe in the people. Not the pitch. The people. Founders you'd want to work with again even if this doesn't work out. A team that makes you better.

When the mission genuinely matters to you. Not "sounds nice" matters—actually matters. Something you'd care about working on even if the financial outcome is disappointing.

When you can afford the risk. This is crucial. Taking a below-market salary or equity-heavy compensation makes sense if you have savings, a working spouse, low expenses, or some other cushion. It doesn't make sense if you're one bad month away from financial crisis.

When the non-equity parts of the offer are reasonable. Even if the equity is a lottery ticket, the salary should be enough to live on. The expectations should be sustainable. The role should be real.

When you've asked the hard questions and gotten good answers. Not perfect answers—startups are inherently uncertain. But honest answers from people who've thought things through.

Structuring the Arrangement

If you decide to take a startup role, here are ways to protect yourself:

Get everything in writing. The equity grant, the vesting schedule, the cliff, what happens in various scenarios. Verbal promises evaporate when circumstances change.

Understand the vesting cliff. Most startup equity comes with a one-year cliff—if you leave (or are let go) before that year, you get nothing. Make sure you understand this and factor it into your decision.

Negotiate for acceleration clauses. In some cases, you can negotiate for accelerated vesting if the company is sold or if you're terminated without cause. This isn't always possible, but it's worth asking.

Keep your skills current. Even while you're all-in on this startup, maintain your network and keep learning. If (when) things change, you want to be employable.

Have an exit plan. Know what your conditions for leaving are. How long will you stay if things aren't working? What would make you leave? Having thought this through in advance makes the decision easier if the moment comes.

Don't let equity cloud your judgment. It's easy to stay too long at a failing startup because of sunk costs and the hope that your equity will be worth something. Set milestones. If the company isn't hitting them, be willing to walk away.

The Real Reason to Work at a Startup

Let me end with something personal.

I've worked at startups. I've started my own companies. Some succeeded. Most didn't. Looking back, the ones I don't regret weren't necessarily the ones that worked out financially.

If you're only considering a startup for the equity lottery ticket, you should probably look elsewhere. The odds aren't good enough to justify that bet on its own.

But if you're considering a startup because of what you'll learn, who you'll work with, and what you'll build—and you can afford the risk, and you've done your due diligence, and you've asked the hard questions—then it might be exactly the right move.

Just make sure you're betting on something real. Not just a pitch deck and a dream.

The Gambling Metaphor, One More Time

I've used the gambling metaphor throughout this series, and I want to close with it.

There's nothing wrong with gambling. People gamble all the time—on investments, on career moves, on relationships. Risk is part of life.

But good gamblers understand the odds. They know what they're betting. They don't put more on the table than they can afford to lose. They make informed decisions, not emotional ones.

Working at a startup is a gamble. Go in with your eyes open, your questions answered, and your risks understood. That's not being pessimistic—that's being smart.

And if you do take the bet, and it pays off? Enjoy it. You earned it.

If it doesn't pay off? You learned something. And you'll be better positioned for the next bet.

Either way, you made an informed decision. That's all any of us can do.

New to this series? Start with Part 1: The Startup Dream and Part 2: Decoding Startup Job Ads.

Thinking about starting your own thing? Our Build Something series explores when entrepreneurship makes sense.