Risk vs. Reward - Choosing Your Startup #4

For the next few weeks, we're going to be featuring a five part series by Sally Bolig, Head of Talent Acquisition at Yotpo. Stay tuned to learn more about how to decide if the startup life is for you!


Case-by-case
Friends and family sometimes recommend questions to ask, but for those my suggestions are the following. Don’t ask questions you won’t truly understand the answers to. Such questions might include ones around ARR or burn rate.

Also, refrain from asking the following unless you feel that given the conversation you have already had, the questions are appropriate and relevant ones.

Some companies won’t be comfortable disclosing the following information and it’s important for you to know that it is not a red flag if they don’t. It will be entirely company-dependent.


1. How are quotas determined?
Asking about quota attainment is the right thing to do, but asking how those quotas are determined can be perceived as inquiring into intimate information in regards to company growth, specific employee success and failure, and a number of other things that aren’t appropriate to explore during an interview.

High level answer - generally quotas are determined by assessing the existing success of a team, then setting goals that will allow them to perform but also be challenged.


2. What is your company’s burn rate?
If the company hasn’t raised money in a while (i.e. over two years), it’s worth asking about the plan for the company and the end-goal they’re looking to meet. This gives you insight into burn rate without asking specifically that.

People often ask about burn rate because they want to know whether the company’s future looks bright or gloomy. You can accomplish an understanding of this through the first-tier questions above. That being said, if you understand the logistics around burn rate, some companies will be comfortable speaking to details around it.


3. What is your company’s ARR (annual recurring revenue)?
This question is asked for the same reason people ask about burn rate. Although ARR is something companies share with their employees, it’s often not something shared during an interview.


4. Equity Expectations
It is absolutely fine to ask whether equity is a component of the package, but you shouldn’t assume it will be. Numerous startups nowadays are offering equity to every person who comes on board as a demonstration of “investment in each employee.”

But there’s a lot to be said for offering equity exclusively to employees who have put in the time to demonstrate an investment in his or her company, rather than the moment he or she walked through the door.