Startups have risky beginnings but tend to have its own long-term benefits. When offered the opportunity, you should take it and explore the many benefits that lies ahead of your career in a startup. Startups may not have lots of money to fully compensate you for all your efforts and work but they can offer you a percentage of the company. In actual fact, when given the option to take equity, you should take it instead of a full salary.
Compensation can be grouped into salary, benefits and incentives. Salaries in a startup are usually competitive whilst incentives are the drivers of attracting and retaining the best employees in startups. In some startups employees are rewarded based on attainment of performance-based goals, others also use a profit-sharing bonus schemes where bonuses are generally paid out once a year in the form of cash or on a deferred basis.
In most cases when it comes to stock options, employees receive the option to buy company shares for a set price during a specified time frame. Option can be exercised by the individual at any time during the agreed-upon term and subject to any vesting schedule.
Most startups commit lots of resources to hire the very best and passionate individuals who will stop at nothing to make sure the business succeeds. Best case scenario: You happen to be one of the first few employees, you contribute to the development and creation of a great product that could end up as a global product, you gain great knowledge about how startups begin from an idea phase to a lasting global company, and best of all you own a part of the company and its value keeps increasing with the growth of the company.
In a startups the first employees shape and create the company’s values, mission, culture and ethics. The process of creating a lasting company culture that works takes time and patience. Most startups try different ways of working as a group, but only settle on what actually produces the results. Its easier and faster to stick with what works and abandon what does not work. Compared to existing businesses with already existing company values, startups shape their culture right from the beginning and are able to adopt new ways faster.
You may not fancy joining a startups because of its associated risks including shutting down, running out of money or going bankrupt at any time, uncertainty of the short-term future, but joining a startup has a lot more associated long-term benefits than a corporation or an existing business. In a startup the small team work together in a small unit.
Startups are all about team work. Aside stock options and long-term startup compensation benefits, you learn how to build a company and product from scratch and also how to wear many hats and take various responsibility which will help you in the future when you set up on your own.