Is an Austin startup job on your wish list? Austin has been a hub for startup jobs for decades now and is recently enjoying another bump in prominence. At the moment, Austin’s startup density is 146% the national rate, ranking 4th among the 50 largest metros.
Something else Austin’s startup ecosystem is enjoying as of late is venture capital. Pre-pandemic funding for Austin startups seemed to lag behind potential. The pandemic changed that. As Fortune Magazine recently pointed out, “Austin’s startup ecosystem has been booming for years, with venture capitalists throwing an unprecedented $4.9 billion into some 387 Austin-based companies last year, per Pitchbook. The city is now one of the more well-funded startup ecosystems in the U.S. and a primary example of investor interest in markets outside of Silicon Valley.”
But just because Austin’s booming with startup jobs doesn’t mean every Austin startup job is a winner.
“Working for a startup can be rewarding, but there are inherent risks,” says Paul McGaughan, Practice Director of The HT Group Technical Recruiting. “Asking the right questions during the interview process can remove some unknowns. In fact, expect to ask more questions—and more in-depth questions—of a startup than you would an established company.”
Here are five questions to start with
1. What makes the product unique?
Startups need to have a solid founding team in place (these tips from Austin-based Fundr cover many of the attributes you want to see). But as Shakespeare once said, a solid team that wants to make lots of money doesn’t a product make (OK, he didn’t say that, but you get the picture). The team should be able to communicate what sets its product apart from the rest. “It’s not meant to be a smarmy, a-hole question. It’s legit. If they struggle to answer or give you a ridiculously long-winded response, you know what to do: Head for the door,” advises Girls in Tech.
2. What does success look like for the company?
It’s crucial to find out the founders’ end game. Do they want to be acquired as soon as possible? Stay independent as they grow into an enterprise? “While you’ll never be able to get a crystal clear glimpse into the future, understanding the general direction the founders want to take the startup will help you decide whether it’s a company you think you’re going to want to work for right now, a year from now, and in five years,” writes The Muse. If the startup you’re interviewing with has grand plans like becoming a unicorn (a valuation of more than $1 billion), look for an equally impressive roadmap to get there. And what about their contingency plans? During SXSW 2022, some venture capitalists warned that a stock market ripple effect could slow down funding and reduce valuations, which could also cause imminent “down rounds” of cost reductions and layoffs.
3. Can you tell me about your work culture?
The startup life can be highly stressful with few boundaries (including work/life). But don’t make assumptions. Ask what the work arrangements will be, what “hard work” looks like, how they protect their staff from burnout, what inspires them, and other cultural questions. Look for unspoken clues that your values align, too. “During the hiring process, I was drawn to how honest and smart each one of the interviewers was and how motivated they all were to try and build an excellent product and company,” Data Engineer Mary Hallewell told BuiltInAustin about Austin-based Babylon. “It was that drive to improve that made me interested in working [there].”
4. How are you funded now, and what are your future funding plans?
“This is one question that job candidates often assume is overreaching. But if you’re considering taking a chance on a startup, it’s not only OK, but it’s smart to find out about funding before you accept the job,” says McGaughan. Lauren Landry of Harvard Business School Online recommends specifically asking about the startup’s “runway,” which is the amount of time a startup has until its current funding runs out. “[It] says a lot about how sustainable the business is…Plus, the longer the runway, the greater your job security,” she explains. “If the runway is less than a year, you should ask about future funding plans. Is the company trying to raise capital? If so, what types of investors are the founders looking for or working with? Some hiring managers might not want to reveal this, but sidestepping the question could prove just as telling.”
5. How is compensation structured for this role?
Gasp! Can you ask that? Oh yes, you can. Don’t get into the weeds on exact numbers until the job offer stage, but it’s essential to have a general idea of how and when you’ll be compensated. Many startups offer equity and other non-cash compensation that can be difficult to value. Austin investor Cotter Cunningham (former CEO/founder of RetailMeNot) explains how to compare equity options here. Others will reveal compensation structures beyond your comfort level, like, “You’ll get paid when we do, OK?”
Depending on the startup and your role, there are dozens more questions you could ask. Check out these from Forbes and Indeed. In the end, going after any Austin startup job requires a leap of faith. Be sure to ask yourself plenty of gut-check questions (we love these questions to ask yourself before accepting a startup job from AngelList). And don’t forget to seek answers from your recruiter, too. We’re here to help.