Startup Blog 001: Joining the Team

Startup Blog 001: Joining the Team

I joined my first startup in February of this year, and I think for most of you reading this, my journey will be familiar. For those of you considering joining a startup or starting one yourself, this regular blog should be a nice resource to help with the process and maybe provide insight and advice. At the time of me writing this first blog, I have been working on this project for 3 months, so some of this writing is recalling events that have happened already in the past, but I’ve taken the time to document almost all of the process.

Joining the Team
When I was asked to meet with the two founders of this startup, Danny and Dave, it was just them on the team. I made three. I worked with Danny at his other business, and we are friends as well, so the relationship and knowledge of his work ethic were already there. Dave was a long-time friend of his, and because of this, my trust in his ability was not in question. A lot of what I read about startups cautioned against joining teams with friends or starting businesses with friends. Beside the fact that it could ruin long time relationships, it also could ruin reputations within similar professional and personal networks. However, because I had a professional working relationship prior on a project for his business that is still going well, I knew what to expect professionally from him.

The first questions we will all ask about joining a new business, especially a startup, are:

  • What investment is being asked of me?
  • What compensation will I get? Including shares / stake in the company.
  • How much of my time will this involve.

All of the answers to these questions will vary. If you are like me, I already have a full-time job that takes up my 40 hour work week that I am not interested in leaving. I also teach as an adjunct faculty member for a University online consuming 33 weeks of the year. Besides that, I have a family with two small children. This means that the time I have left over from that, is now going to be dedicated to this business and my involvement. If you are like me, there is nothing else I would rather be doing that filling my time with another business opportunity.

Seriously, I love the business of being in business. I like staying busy. I make time to accomplish and maintain all those other things, sometimes they vary, but for the most part, time management becomes the name of the game. To answer those questions above, here is where I settled on the answers for joining this startup:

  • What investment is being asked of me?
    There is no money obligation from myself into this business. We have a small amount of annual seed money provided from the Youngstown Business Incubator, our local start-up incubator, and another small investment from Danny and Dave. I’m sure that if I wanted a larger share noted below, I could invest some money for that percent. At this time, I am not interested in that. My only investment is time and knowledge. Before you complain that time is money, my time is not money when I have ownership in the outcome. My time is just managed differently than if I were working for a client, and because I truly enjoy this work, I believe that I am being paid in dividends that haven’t started yet. That’s the excitement of a startup.My official title would be CMO in this venture, although I am doing quite a bit of the technical setup and planning for the website, email accounts, adwords account, design work; I consider that to be getting my hands dirty before we are able to bring in more people to take over the work and focus 100% on areas that I am segmenting my time to. This gives me the upper hand when it comes time to manage staff because I will be familiar with issues and questions that arise. I highly recommend when you are joining or bringing in new members, you look for people that get their hands dirty. Talking heads are not good in a startup environment.
  • What compensation will I get? Including shares / stake in the company.
    My first email back to my Danny and Dave about their offer to me and what I was expecting is really awesome. It was paragraphs of what if statements with formulas and figures based on sales, commissions and my hourly rates. I tried doing my homework and reading articles about how much a CMO should be compensated with ownership in a startup, especially as the third person to join the business, and I didn’t find much that gave insight. A lot of those recommended making sure you weren’t getting shares because those could be diluted during investing rounds. What ended up happening is after my length email of equations was sent, Dave responded and said this was harder than it needed to be. I was given 10% of the business and I am extremely happy with that offer.
  • How much of my time will this involve.
    All of what is left of it. I find myself making notes about the project all day. I try to spend 2 hours on this project each day, and that isn’t enough  to be where I think we should be in the process. Because the other two partners have full time jobs and families, they are understanding of these issues. As this project matures and we launch, there will be even more time needed from all of us, but the payoff will be revenue.

If you can answer these 3 questions going into joining a startup, it will help you make the choice to actual do so. I didn’t say yes right away. I waited until I discussed it with a few others who’s opinions I respect, and once I knew I could give the 100% of my time and effort left over from everything else, I committed and joined the team. While you are in this process, take your time and get opinions from others. When the time is right, you will know!

I haven’t mentioned the actual project title or what it is at this time because it isn’t launched even in a beta phase. I will spend a lot of time on the actual project in the near future, but for now, speaking on pure experiences that have happened in the short 3 months will provide a lot of insight that can be used while you get started.

 

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