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Should I Join a Crypto-Startup?


a friend asked me if they should join a startup, a crypto startup to be more specific. And this made me think a few things, and I thought of sharing more openly about this Because there are many times we don't talk about these things and actually we harm the other person by being overly supportive and positive when they would benefit from a more balanced view My friend wanted help to evaluate the value of the equity they were offering to her. But I think there are a little bit more fundamental things before we get to the equity discussion. And to start with, there are two main parts of the equation of if you should join or not a crypto startup, one of them is who you are. And the second one is what the crypto startup is. Let's start with the first one - who you are.

I would say there are three components on the question who you are. One is, what do your costs look like? Two is how senior you are. And three, what are your alternatives On the first one? What do your costs look like? You know, if you're about to join a startup and you live in a very expensive place, probably it can not work by any means possible. So unless you are super rich and you can afford not to have good enough income for quite a while, maybe what a startup can offer cannot cover your needs, which means that you will not be able to be sustainable in a startup. And that's the end of the story. And that might be particular true in very expensive cities, like for example New York, you know, unless it is a very well funded startup, which maybe is not that much of a startup anymore it's possible that they will never be able to hire you.

The second one, the level of seniority is again, an issue, right? Because if you are very senior you might be extremely specialized and maybe the startup needs someone who is a little bit more broad and willing to work on lots of different things, and maybe they don't need all the specialization that you have. Right? So again, one thing to consider and the third one, the alternatives is also super important because it'll take lots of faith on the vision of the startup if your alternative is like a very, very well paid, safe, established job, where you can do what you dream and you have infinite resources in a very established company. So if the startup competes with that, maybe it'll be hard for them. On the other hand, if your alternatives are a graduate position, highly likely, it's a no brainer to join the startup because at very least you will get some broad experience and very fast To summarize this.

If a person is for example, a graduate student in Spain or Portugal, and you contrast that person with an established professional in New York, there is no comparison For one person it's almost a no brainer to join a crypto startup For the other person it'll need lots of you know research before a person can take that decision For the more senior person, maybe the only viable way of justifying that is a long term commitment to a shift of career. For example, into crypto startup type of jobs, which would you know, include equity, but also it would require the person to think of a multi-step approach where they start in this industry, they invest six months in a team. They know that the team might fail. They might jump to another team and then another team, and probably in one or two years, they will be in a very competitive position on this industry, but this would be a multistep approach and it would require lots of commitment and determination from the more senior person to do this shift.

And that's the first question on who you are. And now the question of what the team and the project looks like. One thing to ask is why do they want you specifically? And there, you might find many different answers. The most obvious and expected one is that they want you because you have some specific skill, but you will be surprised that many times the incentives are kind of different. They might want you because they want to say, Hey we have a Googler or we have somebody from Facebook working for us. So just the fact that you join the team is for them an indication of trust and it looks much better on you know, the structure of the team and that's something you should take into account. How much value do you add to the team when you join the startup?

And this means that you have to pay particular attention to the structure of the team, because in contrast to a big company where you have a relationship with a company overall, and if something doesn't look like a good fit, you can jump to another team or you can be strategic for a long term career in that company, in a startup, it's all about the team. And if the team, for example, is less senior people, that they try to persuade you to work for them. There are some serious questions that you have to ask. For example, let's assume that the founders, if they were about to find another job in a company, their salary would be at this level and your salary is in that level. And you know, that that means that after probably half of a year, year or one year, if you want to be fair then the equity you would have in the company would be more than theirs.

So in a sense, you are hiring them instead of them hiring you. This is something that you would never have to consider in a more established company, but in a startup that's the case. And many times the funding they might have been negotiated is dependent on milestones that will depend on your work more than their work. So it's not always the fact that you have a new idea that makes you own the company execution is defining the success of the company. So it's a question and there's some serious negotiation that has to take place there. Now you have to know when this has happened in the past that in such a discussion, the founders might react very badly because they really believe that they have something exceptional and they own the company, and maybe they will mention deals that they have done and funding they have secured. And you should do your, due diligence there because many times those deals are not as well established as the founders will claim sometimes the main argument on why the founders should have most of the equity is actually their ability to persuade people like you to join the team. And you have to think about it because actually you give them this benefit.

Bottom line, you have to evaluate the team very carefully. You might add much more value than the technical skills. In the traditional company, probably that's it That you are the technical skills, but in a startup you might easily double the value of the team and also bring credibility and other such "intangibles".

A second thing to ask is what they give to you. And this is a little bit beyond money because if the startup is like, Hey, we have a Jira board and here are the tasks. And then you might also get on top of your salary, some equity okay, this is not convincing enough because if the mindset in the startup is such that you are seen as a limited execution role, basically writing code or doing marketing or PR, and you are not expected to influence in a big way the startup, then maybe you can much more money by doing the same thing in a big established company, right? And there are some startups like that startups founded by people with lots of seniority, which is effectively spinoffs or copycats of the previous company that those people worked for that already they have very strong leadership and they know exactly what they want and actually it's probably not different for you than working for a big established company.

In terms of the money and the equity they offer. You have to understand that highly likely it's a verbal commitment with the team. Maybe they offer you tokens which is maybe seen as a form of equity, but all this thing is actually taking potentially your work and give it back to you Because you have no guarantees that the team will be there in nine months time. And actually I have heard stories from people that had secured in their mind funding for nine months from a big crypto space company. And they were given promises and more promises from a founder who was very ambitious actually after one year they had been paid no money, no grants from the crypto company and the startup dissolved and yeah, lots of hard feelings there, I guess.

And this is probably the norm. So even if you're promised lots of equity and maybe a salary, you have to see if this is for real, and this is big part of the risk you take that it might not be real. So those are some things to keep in mind, and it's not all doom and gloom. More specifically, there have been very nice companies crypto startups that allow you to cooperate with them. Many of them are seriously and real open source, and they're not afraid of that. So you can go and start to contribute to their projects and, and gradually you know, see if you like the people get the feeling of if they are serious about their funding and get to know them and have very low risk when you join them. And when you see lots of secrecy and all these weird atmosphere of there're things, you should not be asking, that's a red flag, right?

So maybe the best idea is to not really quit your job and go work for a crypto startup, but try to converge and see if you're a good fit and maybe give it a month or two. You have to let them understand that you're not really committing to the project, but just contribute. So they should expect less. But this will allow you to know each other and maybe by definition your answer to yeah - I would like to hire you. How can we do that? Maybe the answer should be by default, I'm not open for hire right? Because the majority of people very eager to hire you even before they know anything about you. Maybe it's not a good deal. In the contrary, maybe you should go out and look for the five or ten startups that you are interested working on.

And maybe you could like to look a little bit deeper, not just the first thing that comes out of Google look closely at how you feel, what are your ideas about the future and find those niche startups that can really you know, represent you. And even if they don't succeed, you will feel like you had a good time and you did the right thing, and then try to approach those people and start to find a common ground and work together. Finally, one mindset thing that might be useful is some of those companies that you might say yes or no, and most likely no will be super successful. And you will go back and see and go, like I did this stupid thing. I didn't put money, or I didn't join this company when it was small and that's perfectly fine. There are all sorts of money out there.

and some money is your type of money, but all the other money is not your type of money. You, you don't care about this, they are for somebody else, right? So you will say lots of nos that will turn out to be lost opportunities, but they weren't your opportunities to start with. So don't worry about that so much. And kind of give yourself the permission to say, Hey, given what I knew back then and what my feelings and my thoughts were, I did the best I could, and that's all you should aim at. Otherwise after 15 years in this industry you will be full of regrets for all the lost opportunities, but think about it. They were never your opportunities. They were some other person's opportunities. The goal is to do the most out of your opportunities, the things that you feel strong about and you want to work on and you are passionate, and this must be the main drive I think beyond equity and little money here, little money there.

At very least when you want to join a startup, you have to really love what the startup does. So I hope you find this useful. Thanks for watching!

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