How should we think about Startup compensation?

Start by reading up on all that it means to be a startup.
I’m a fan of Steve Blank’s definition, that a startup is a temporary venture in search of a business model.
Which means a few things:
  1. It will not last, the way it is
  2. It is very unpredictable
  3. It does not have sustainable revenue
  4. It will likely fail.
Many will disagree with me, and even prove me wrong (showing “startups” that are hiring) but I’d refer back to those points and argue that those things aren’t really startups anymore or that it isn’t fair to call what they have “jobs.”
We know what jobs mean, culturally. While not guaranteed, they are reasonably stable, pay, an offer benefits.
Startups can’t provide those.
So how do you approach working at a startup? (Investors hate it when I share this notion, because they argue their $$$ invested is somehow more meaningful or better than your time/reputation/out of pocket)…
You consider working for a startup like an investor.
Will it deliver a return?
It will underpay, if at all. It likely won’t have benefits (although some help pay for health insurance before actually paying salaries). You will change descriptions. You will likely be looking for another job in 6-18 months. That’s working for a startup.
And that’s a key phrase, if you want to work with startups, think of it as working *with* startups; not working for a startup.
Your job is you.
You look out for yourself and you have a job “working with startups.”
As in, many. As in, something else next year.
This isn’t working for Dell or Deep Eddy Vodka.
I talk about this a lot, a wrote a little. Here’s one take
How do you consider the compensation arrangement? Is the *investment* worth it?
Money is just a small piece and if that’s your priority, you probably shouldn’t work for startups (get a job at a company, even a business that calls itself a *startup* if that makes everyone feel better).
You also need to consider:
  • Experience
  • Passion
  • Time spent
  • Impact on your reputation
  • Future
  • Equity and ownership
  • Will that equity be worth anything? (Not likely)
That sounds like advice similar to someone considering a job but it’s not because those considerations matter FAR more… Keep in mind, the pay, commitment, stability, and benefits are far less certain, so you have to make of the other things, even more, for yourself.