What Stage Startup Is Right For You?


What Stage Startup Is Right For You?

Do you love the thrill of the unknown? Working at a startup can be one of the most exciting and rewarding experiences of your career. Just imagine, you’re surrounded by people who share your enthusiasm for doing things differently and who also want to make an impact.

But in a way, the word “startup” isn’t a perfect catch-all. Depending on the industry and location, startups can mean many different things. Furthermore, startups go through several different stages throughout their development process.

Each startup stage offers its own advantages and has some potential drawbacks. That’s why it’s crucial to understand the general startup timeline before deciding what stage is right for you.

What Are the Different Startup Stages?

Each startup goes through three basic stages:

  • Early Stage
  • Growth Stage
  • Late Stage
Early Stage

In this early stage, the founding team develops their idea and begins to execute the plan to make it a reality. 

During the early stage, the team is working on building a viable product and deploying it with early customers. This demonstrates the market fit and provides evidence for determining the right sales strategies to fund future growth. The early stage is also when the team solidifies its core members and hires additional team members to fill key roles. 

Once the team has been established and there are enough KPI-based metrics to prove market fit, the startup can move to the next phase.

Growth Stage

The second stage is focused on execution and growth. This is when a startup takes its product to investors who can fund immediate expansion. Funding requires evidence that a product has significant potential for success, so the team must refine their ideal customer profile and establish their company culture. 

There is still room for improvement in the growth stage. A product may require several iterations before it can compete in the market, and this may also require hiring additional team members. 

Once the startup has hit ambitious growth milestones, hired a complete team, and attracted significant funding from venture capitalists and other investors, it’s ready for the next phase.

Late Stage

The final stage is all about performance. By this time, investors no longer view the startup as an unknown risk. Instead, they can examine a large amount of data that proves the business model's viability and points to further success.

Late stages of startup growth include expansion into new markets, launching additional products, or broadening their customer base.

In addition, many startups in the late stage are planning their exit strategy. For example, venture capital-funded startups often have the prerequisite goal of being acquired by another company within a specific time frame. 

How Risky Is Working At a Startup?

Working at any startup involves a certain degree of risk. Since most startups set out to test unproven business models or innovative new products, a majority of them don’t reach their goals. There is a constant struggle between dedicating time and resources to securing funding or working on the core business.

Therefore, timing is a major factor in determining the risk of working at a startup. When you join often matters just as much as where you join. 

Generally speaking, joining a startup in the early stages is riskier than joining in the later stages. That’s because funding may not yet be secured, and team roles are not entirely defined. 

For example, the riskiest startup stage to join is the early stage. Whether you’re a founder, co-founder, or core team member, early-stage startups may be strapped for cash and unable to pay industry-competitive salaries. As a result, founders often contribute significant amounts of their own money without any guarantee of returns. In addition, working for an early-stage startup requires you to put a lot of time into building a company that may never take off.

If you’re looking for a less risky opportunity, join a startup in the growth stage or later. These companies already have a market-tested product and are likely to have secured enough funding to extend their runway. While funding is no guarantee for long-term success, later-stage startups can provide performance metrics that paint a more realistic picture of the company’s trajectory. 

But risks also come with rewards. Building a company from the ground up can be incredibly fulfilling. It can boost your career growth and help you gain valuable experience in various roles. In addition, it can potentially be very financially rewarding. If you have equity in an early-stage startup that goes on to achieve commercial success, all your hard work is likely to pay off. 

When Should You Join a Startup?

Each person has their own set of priorities. These include financial goals, career aspirations, and appetite for risk. 

Understanding your priorities can help you determine the best time to enter a startup’s journey. What are you willing to sacrifice, and what is non-negotiable?

Here’s a rundown of the benefits and tradeoffs of joining a startup in each growth stage. 

Early Stage

When you join a company as one of the first few employees, you may be expected to wear many different hats. You’ll need to be highly creative and play a key role in determining the company's direction and the viability of its business model. As this is the stage with the greatest degree of risk, it also carries the highest potential for financial reward if the company succeeds in the future.

Joining a startup in the early stage isn’t for the faint of heart. It requires a lot of hard work, and the burden of failure is on your shoulders. However, this pressure is precisely what pushes some people towards greatness.

Who should join at this stage?
  • People who are comfortable with taking risks and operating without strict guidelines
  • People who are energized by possibilities and have the determination to turn them into realities
  • People with flexible, well-rounded skill sets
Growth Stage

Once a startup has secured a certain amount of funding and has a viable product, it attracts people who seek a balance of opportunity and stability.

Joining during this stage often guarantees a better work-life balance because much of the most difficult groundbreaking work has been done, and the company is settling into its own culture as the team expands. 

Who should join at this stage?
  • People who have specialized skill sets but can still be flexible
  • People who want to be in an entrepreneurial environment but maintain work-life balance
  • People who want to have more ownership over their role than they might have in a larger institution 
Late Stage

Startups in this stage often resemble typical large companies. They may have large departments and cannot innovate at the same speed as before. 

This results in a much more stable work environment that still has the benefit of making an impact or forging a new path in an established industry.

Who should join at this stage?
  • People who enjoy routine and stability but also want to contribute to an innovative company
  • People with highly specialized roles
  • People who are experienced in managing teams

Should You Work At a Startup? 

Before deciding which stage to jump on board a startup, it’s worth taking some time to consider whether working at a startup is a good fit for your personal working style and career aspirations. Startups may sound exciting, but they can also be unpredictable environments that aren’t suited for everyone. 

One of the main advantages of working at a startup is the freedom to make your role your own. There’s often less oversight and more collaboration in startups compared to established organizations. For individuals with an entrepreneurial spirit, startups offer the right environment for exploring different paths to growth and success.

Here are some other advantages to working at a startup:

  • Ample opportunities for learning new skills
  • Higher-ranked job titles
  • Potential for significant financial reward
  • Sense of accomplishment and purpose
  • Witness the direct fruits of your labor
  • More flexible work environment

However, working at a startup also has some drawbacks that may make you think twice before accepting an offer. For one thing, most startups fail. It’s highly likely that the company won’t be around in a year or two, so make sure you keep your resume updated. 

In addition, working at a startup can be stressful. There is a lot of pressure to scale as quickly as possible and for new hires to hit the ground running. Expect to put in overtime, because the lines between work and the rest of your life may start to blur. 

Here are some other potential disadvantages to working at a startup:

  • It may affect your future job prospects if the startup fails.
  • Training may be limited or non-existent, so expect to provide value immediately. 
  • Most startups fire as quickly as they hire.

So, how do you know if a startup is the right fit for you? Unfortunately, there’s no straightforward answer to that question. Each startup is unique, and individuals may work at several different startups before finding the right fit. However, if most of the following statements describe you, you may be well suited to working at a startup.

  • You’re comfortable with figuring out your own solutions.
  • You thrive under pressure and when carrying a lot of responsibility.
  • You work best in a close-knit team.
  • You’re a creative thinker who is flexible enough to take on different roles.
  • You’re willing to take on a higher degree of risk in terms of job security or finances.

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Mentor Spotlight: Aritra Ghosh
Mentor Spotlight: Aritra Ghosh
Meet Aritra, Product Manager at Azure (Microsoft) and Product Mentor at The Commons!
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