Working at a startup that's showing signs of trouble... how to prepare?
April 12, 2016 7:12 PM   Subscribe

I jumped from a big stable company to a startup about a year ago, and now it's growing increasingly clear that things are not looking good for the company financially. If I'm being conservative, let's assume that in 3 to 6 months I know if we'll make it, or if part or all of the company will go under. How to prepare? COMPLICATION: Having a baby soon!

I've been really happy at this startup and would love to see it thrive and continue, so I'm not really sure if I should put all my eggs in this basket and do everything I can to see the company survives, or if I should start looking around for other options. I am a leadership position, and whatever I decide will have a cascading/domino effect at the company. Also, since I'm having a baby soon, the company's troubles may hit at the exact time I'm out on parental leave. What to do?

— Do I leave before it collapses, or ride it out? I am a key principle in the company, and it would be public news (bad news, news that would hasten the company's demise) if I left. At the same time, would I look like a "smart" person to get out before it gets bad? Will my current colleagues think I betrayed them in a desperate hour if I jump ship? What's the most professional move as a leader?

— How do I network to prepare myself, when I'm not sure if the company will survive? Do you drop hints you might be looking, do you actively look for work?

How to respond to headhunters? I get inquiries pretty frequently, but not usually for jobs I want. Do I start a relationship? Follow on in their requests?

What else do you wish you did when you were in the same boat? Save up? Get a new job? Do one big final project you're proud of? Hunker down and put in 110% effort to save the company?

What can I do for my employees and teammates who aren't able to forecast the troubles ahead as accurately as I can? I work with a lot of junior people and they may be blindsided. Is there anything I can say to prepare them without spooking them?
posted by yearly to Work & Money (9 answers total) 4 users marked this as a favorite
You say you're a key principal. Do you hold significant equity in the company? Because, if you don't, you're still really just an employee and your responsibilities to your colleagues are limited.
posted by praemunire at 7:49 PM on April 12, 2016 [6 favorites]

1. How long can you go without a job? Assume if this collapses you get no severance.

2. Ask the CEO how much runway they have and the odds of raising another round - if you're not VC funded then the runway is basic math. A good CEO will be honest with you.

3. You're having a baby and there's no bonus points for riding things out on a sinking ship.

4. You can't prep your employees without spooking them.

5. Chat with headhunters, ideally ones you may know or trust, they're how you look for work without "looking for work". If nothing else you can look for a job you like as much as this one but with no stability. Its always easier to look for a job when you don't need one.
posted by bitdamaged at 7:51 PM on April 12, 2016 [3 favorites]

I think you should gauge the market with headhunters and by sniffing around openings to see how long you would be out of work, and if your finances would cover it.

If you do not have the money for that gap, then perhaps you should look elsewhere.

It's easy to keep a dialog up with headhunters, you can just talk about looking for X for your company, and see what the availability and comparables are.

I can't think of anything to say to people that wouldn't cause A: drama or B: bolting for the door.

You could look at their tasks and skill sets and see if they need to be stronger in certain categories, which is good for the company and good for their future.

I really appreciated a job where my peers and managers were also parents, they understood the mornings I came in bleary eyed and was pretty slow on the uptake some mornings, or the times I came in with an odd stain on my tie, or having to take a morning off to attend a doctor's appointment.
posted by nickggully at 8:11 PM on April 12, 2016

I was in legal and not a startup, but my advice re: headhunters is the same. I ALWAYS took headhunter calls, even when I wasn't actively looking. You can always tell them you are interested in hearing about appropriate positions just so you can keep tabs on the market. You never know when a great opportunity might come along, even if things are happy and stable, and cultivating those relationships is something worth doing.
posted by gateau at 8:14 PM on April 12, 2016 [8 favorites]

Make sure your LinkedIn profile is up to date. Recruiters looove LinkedIn. You'll get a lot of contact if you have a public profile. It's also good to have a personal site with a link to your public LinkedIn profile. You'll get contacted with two types of recruiters. There are the internal ones that are just trying to collect a bunch of potential candidates, and then there are the headhunter/staffing firms. Big company recruiters usually just get your details and then hand you over to the hiring manager for a particular team after giving you a short spiel about the available positions. Headhunters usually have one particular position which they are sometimes obnoxiously vague about (because they don't want you to contact the company directly, thereby bypassing the headhunter).

If you feel like you're being disloyal when you're talking to recruiters, don't be. The standard line is you're "open to new opportunities." Don't tell a recruiter or hiring manager that your company is falling apart or that you're unhappy in your current position. You're just "looking for new opportunities" or you're "interested in hearing about opportunities." That's code for "you can try to sell me on a new job."
posted by deathpanels at 8:40 PM on April 12, 2016 [3 favorites]

Random thought, but it strikes me as a good thing that you are going on parental leave soon. One, it is a typical time for someone to leave after leave is up. Two, it gives you time to see what the market is for your services and for the business. Three, if the business does close during that time, it gives you some distance from it.
posted by AugustWest at 9:39 PM on April 12, 2016 [1 favorite]

How to respond to headhunters? I get inquiries pretty frequently, but not usually for jobs I want.

Do you mean jobs that you are a genuine fit for but don't want or ones that are completely not what matches your experience? If it's the latter, those headhunters have been way more trouble than their worth IME.

If you're updating your LinkedIn, turn off the feature that sends out an announcement every time you tweak your profile (which is on by default), or you're likely to spark a panic that you're leaving.

If you're jumping ship, you should spend some time about what type of life do you want post-baby. If returning to big stable companies offers more reliability and less hours than a startup, that may be worth sacrificing interesting work and potential money for. The first year or two of motherhood will likely to be sleep deprived and stressful - adding uncertainty on how long you'll have a job may not be what you want.

If you think that the company might be saved but that there's risk that it will go under, you might negotiate for more equity to compensate for your risk. You won't make friends doing so (and beware of dilution, especially if they have to raise more VC money), but if you are taking a significant risk and are a linchpin, it's not unreasonable.

Hunker down and put in 110% effort to save the company? ... What's the most professional move as a leader?

Will it make a difference? Are the problems anything that you and your team can actually effect change on? Burning yourself out for nothing is definitely not the way to go.

A good key leader should try to do what's best for both the company (in that a healthy company is good for the everyone) and the workers (including themselves). If the ship can be righted, they should push to take whatever actions are needed to do so. If it's going down, the responsible thing may be to wind the company down in a controlled manner rather than to keep trying to the bitter end. If it's hopeless and/or the top management can't or won't take the steps that are necessary, then it's time to make for the exit. There's another school of thought that says that you should simply do whatever's best for you and company and workers be damned if they're collateral damage, but that's not really being a leader, just being in a position of power.

Lastly, in an ideal world it wouldn't make a difference, but interviewing while not visibly pregnant is to your advantage if that affects your timing decisions.
posted by Candleman at 10:45 PM on April 12, 2016 [1 favorite]

I've worked in startups consistently more or less since 1996. If your start up is floundering it won't be news to anybody else in the industry. If you are a founder / have significant equity you might want to ride it out because maybe there is an acquisition or aqui-hire in the works that could be lucrative for you. If you don't have significant equity then making sure you can pay the bills / take care of your family in the short term is the priority because there really isn't any upside to sticking around. It's a paycheck and if you get a better paycheck you take it.
posted by COD at 6:02 AM on April 13, 2016 [3 favorites]

This is really helpful so far! Thank you!! Just a few questions answered:

— We have runway through the middle of my maternity leave. It could be extended for a number of reasons depending on the health of the business.

— I do have significant equity but the founder seems resistant to exploring acquisition options, although she could just be bluffing to keep the team calm.
posted by yearly at 11:13 AM on April 13, 2016

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