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Excited about Startups? Pros, Cons, Salaries of Working at Startups

Mar 02, 2023
8 min read

Are you thinking about working for a startup? While there are risks associated with working for a startup, the potential rewards can be great. Startups offer opportunities for growth, as well as the chance to work with smart and passionate colleagues. It can be an exciting opportunity with lots of potential for growth and learning. Startup jobs offer very steep learning curves, and an experience and environment unlike that of a stable, larger company. Which has pluses, as well as minuses, and of course depends on a case by case basis. 

Pros and Cons of Working for a Startup

Startups are fast-paced and uncertain environments with plenty of opportunities to learn and grow. On the upside, startups often pay higher salaries than established companies, and may offer stock options and profit-sharing plans. They also tend to have a more casual and flexible work culture, with perks like free lunches, napping rooms, and happy hours. However, one of the biggest risks is that the company may fold, leaving you without a job. Although, on the other hand, “no risk – no fun!” 🙂 

Benefits of Working for a Startup

One of the biggest benefits of working for a startup is the potential for higher salaries. Startups often offer competitive salaries to attract top talent, even if they can’t match the salaries of larger, established companies. One key thing that startups can offer, that most large companies are afraid of offering, are flexibility and a specific culture. This help attract people who are aligned, often eager to get out of their comfort zone, and who seek flexibility in the form of hybrid work, remote work, flexibility around taking time off, no dress code, and so forth. 

Another advantage of working for a startup is the opportunity for growth. Startups are often looking for people who are passionate about their work and are willing to take on new challenges. This can mean that there is plenty of room for advancement and new responsibilities. For sure you will face an extremely steep learning curve, where you will learn not only about your job, but through ‘osmosis’ you’ll learn about the functions of others on your team and what the company as a whole is doing. For example, if you work in recruiting, you’ll learn more and faster about growth marketing, growth engineering, product design and development, strategy and business models, and so forth. 

If you’re passionate about the product, service and/or mission of the startup, that certainly is a good sign. It will keep you motivated and aligned with the team, keep you going, you’ll learn more, and get more satisfaction out of your startup job. 

Startups also frequently offer stock options (or at least they should in my view!), which can be a significant financial benefit if the company does well. However, it’s important to remember that this is not guaranteed as it involves risk. 

The Costs of Working for a Startup

Startups are less stable than established companies and may not have a proven track record of success. This means that there is a higher risk of the company failing, which could leave you out of a job. 

Moreover, the small team nature means you’ll be really influenced by the personality and temperament of the founding team and those around you. There are no processes in place and almost no resources – you cannot expect hand-holding, being ‘nannied’, or that something “is not in your job description”. In fact, if you are not willing to do things that are not part of your job title, you probably should not join a startup. 

Furthermore, startups do not have the same level of brand recognition. This means that working for a startup that fails could leave no brand mark on your resume. But you shouldn’t join for this reason (ie. brand). You should join for the experience, the camaraderie if you see culture fit and mission alignment with what the company does. 

Is Working for a Startup Right for You?

Remember that a job is about more than just money, and you should choose a company that aligns with your values and career goals. If you’re curious how this could fit you, take the following assessment with Gyfted that are specifically designed toward career discovery – our startup mindset assessment, career preferences quiz, and cultural fit assessment. Working for a startup can be an exciting and rewarding experience, but you should consider the risks and rewards of it. If you’re considering working for a startup, research the company/product thoroughly using the company’s and founder’s social media accounts and website, and weigh the risks against the potential rewards. 

Startup Salaries and Compensation

When it comes to startup salaries, they are lower than salaries at corporations. Startup jobs often pay less than market rate, unless they’re venture funded in which case they might be pretty good. Often employees may receive other forms of compensation such as stock options in the company, which give employees the right to buy shares of the company at a fixed price after meeting some conditions (such as vesting – time you work for the startup). We’ll focus on cash compensation here.

Here’s what you need to know about startup salaries and compensation:

  • According to Payscale, the average salary for US startup employees is around $101,000 per year, ranging from $54,000 to $185,000.
  • When it comes to startup salaries, they are lower than salaries at corporations.
  • However, specific job titles can have different salary ranges. For example, software engineers can expect an average salary of $102,000 per year, while product managers can expect an average of $112,000 per year.
  • Startup interns should be paid at least minimum wage, but might work for free in exchange for specific learning and experience.
  • Most startup funding goes toward paying employees, who typically receive both a base salary and stock options.
  • Stock options give employees the right to buy company shares at a fixed price, with the hope that the stock price will rise in the future.

Gyfted is developing a salary page and guide with real-time remote and hybrid job data on salaries. Be sure

Negotiating Your Startup Salary

While startup jobs often pay less than established companies, there’s usually room for negotiation. Here are a few tips for negotiating your startup salary:

  • Consider your cost of living.
  • Highlight your years of experience and specialized knowledge.
  • Discuss your unique personal traits, strengths, and alignment with the startup’s mission and/or market and/or product. 
  • Discuss how your salary and stock options will increase as the company grows.
  • Consider accepting a greater equity stake in the company in exchange for a lower salary – this is always negotiable. 
  • Negotiate for perks such as job title or flexibility.

Working at a startup really depends on your personal circumstances and what you want. For sure do not do it because others around you are doing it, or because it’s the LinkedIn, Twitter, TikTok trend, or because you think it’ll be just like it is presented in TechCrunch or VentureBeat. Startup work and life is often hard, but the learning curve and experience can help you progress faster in your career than working at a comfy corporate role.