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There are 2 kinds of people –

First, who dream of getting into an established multinational company with an established role and a salary digit which leaves people awestruck.

The other one includes people who want to work with emerging companies, better known as startups. These might offer less pay but the opportunity could be exhilarating. 

This swift comparison between “the established vs the emerging” attracts a lot of debate. However, one cannot disagree with the fact that every established brand or company was once an emerging startup. This is often the reason why a staggering number of people are inclined towards them.

If you’re among those who are inclined towards working with a startup, this article is for you.

Your next steps include you to discover your requirements and expectations from the job. Based on a totalitarian approach, these are the three most common types of requirements an employee has from a job.

1. Remuneration or monetary benefits 
2. Growth and recognition  
3. Cultural diversity and socialising

You need to prioritise what amongst the following holds key importance and ask some questions before committing your time and effort to the job. 

Here are some common questions to ask before joining a startup for your reference:

Remuneration Or Monetary Benefits 

The popular notion regarding startups is that they pay excessively less to their employees. While many researches support this statement, yet there is no universal declaration as of yet.

The salary structure of any startup depends on a variety of factors, like the stage at which it is currently operating or the niche under which you are employed.

Most of the comparisons made between a startup and a globally established company are made in terms of market rate, for comparing the average salary. However, if you look closely you will understand how biased this method of considering the market rate is. 

A startup in its initial stage is not in a position to flex according to the market equilibrium in terms of salary. However, if you look at the long term picture, it will strike you that it is the startup that amplifies your earning potential to unimaginable rates, which again won’t match the market rate. 

Questions To Estimate The Earning Potential 

If you are offering your skills in exchange, you need to know how much pure cash you can make via this startup. To make this estimation, 3 questions will help you get sorted.

1) What’s The Scope Of Salary For This Position?

How much is the salary? Is it worth your effort, dedication, mind?

Will putting more effort help you earn more?

2) How Is My Remuneration Going To Be Measured? 

Understand the process and salary policies adopted by the company while paying its employees. 

3) What Is The Criteria For A Bonus? 

Understanding if bonuses are timely or work-based or event-based. This will help you assess when and how you can improve your chances of earning more. 

Now, what if the salary estimation is a surprising (positive) amount, but the chances of this startup to crash by the next year is high. If you have such notions, you need to add some additional questions to your list. 

Questions To Assess The Long Term Feasibility

If you have a mixed opinion about the survival chances of this startup, here are the questions you need to ask.

4) Is The Company Market-Ready With Its Offering? 

Does the offering has a proven product-market fit or is the company still in the testing phase?

A startup that is still developing a product has more chances of failing in the coming future.

5) What Is Its Current Stage Of Revenue Generation? 

Usually, startups go through these three stages of revenue generation –

• No revenue: In this stage, the business doesn’t generate any money from its business activities and the expenditure is covered by a limited investment.
• Break-Even: The business generates enough revenue to cover the expenses.
• Profitability: The revenue generated is more than the expenses and is expected to grow.

Here, it is also important to understand that revenue and profit are two entirely different concepts. While profit is accounted for after deducting expenses and operating costs involved, revenue is concerned with the amount earned from the primary business or ‘sales.’ It does not take into account any expense or debts for its calculation. 

6) What Is The Burn Rate? What Is The Runway? 

Burn rate is the rate at which the startup uses its liquid cash. It is a periodic measure calculated by accounting existing and new cash inflows and cash outflows of the company.

Runway is the amount of time the startup has before it runs out of cash.

Suppose the startup has an investment of $100,000 and generates $1,000 per month. It, however, spends $5,000 per month. The burn rate of this startup would be $4,000 per month and its runway be 25 months.

An additional question would be to look at the kind of people involved in the top management and their long term vision for the startup. How flexible can they be with the needs of the changing times? 

Questions To Assess Prospects Of Gains Through Equity 

Equity in a startup requires quite a lot of research and one needs to be properly equipped with the required knowledge. If you are skeptical about this option, ask these 3 questions to determine your equity windfalls in this startup. 

7) How Much Percentage Do These Shares Represent? 

There is no point in deliberating over the number of shares you hold. Rather focus on the percentage that they represent. 

8) What Does It Mean For My Total Preference Stack?

In case there is a huge sum owed in liquidation preference, your equity is likely to be of much more loss than a profit. 

Liquidation preference is a guarantee for some preferred shareholders (investors) that they’ll get paid first and at least a certain amount when the company sells.

This makes the employees’ share even lesser valuable.

Here’s an example –

Suppose an investor invested $2 million in a startup you work in. In return, the investor got 20%, the two cofounders got 35% each and the rest 10% is split evenly among 5 employees.

Now, after a few months, the company sells for $8 million.

Here –

• The investor gets $1.6 million,
• Cofounders get $2.8 million each, and
• Each employee (including you) gets $160,000.

In this scenario, while the cofounders became millionaires and the employees got a good share, the investor lost $40,000.

Now, to protect his right and his investment, the investor is usually guaranteed a liquidation preference – let’s say $5 million in this scenario, which results in a drastic reduction in the share of employees.

9) What Will Be The Minimum Price For Me To Exit?

Setting a minimum price will help you compare the final amount you are likely to earn from the established base. 

You know equity is safe and profitable when they represent a decent percentage, is not indebted with a preference stack and your final payout can be a massive IPO turnout too. 

But, if you are one of those people who are much more inclined to achieve a career oriented  growth rather than pay related growth, then the questions are a bit different. Let us look at the next section to understand the needs of this section of wannabes. 

Growth And Recognition 

Before getting deep, let us try to understand why growth in this section is different from monetary growth. The common assumption is that the end goal should be to earn in millions and further, expand this income size. 

Let me give an example to explain this better. The Silicon Valley is home to five of the world’s eight most valuable companies, capturing almost $4 trillion, yet they employ merely 1.2 billion. These companies are increasingly supported by AI and hence, they provide limited opportunities for a person to grow. 

They might pay you a lot but at the end of the day, the work involves doing the same stuff every single day. As a result, several employees start looking for jobs that provide them with more job flexibility and diverse roles and responsibilities. 

Now let us try and decode what we need to ask ourselves before getting into a startup with such requirements. 

10) What Are The Available Growth Opportunities?

Sometimes, people get hired for a position they have always been dreaming of. But the functions seem to get boring after some time as they get repetitive.

You need to identify if there is enough room for you to flex all your skills and upgrade accordingly. 

11) Will I Be Given Responsibilities Or Will I Be Just Merely Accountable? 

Identifying a role that provides enough growth means identifying how much responsibility you will be subjected to. This responsibility will further lead to accountability.

As an employee, you will be asked to get something done. Not getting it done might lead to serious repercussions. However, you are not included while deciding the time frame required to get the job done or provided with the required resources. This is merely accountability. 

You need to get yourself into a position that provides scope for responsibility under which there is decent scope of independent decision making as well. 

12) How Do I See The Best Person In This Skill Growing In This Position? 

If someone with the best skills of playing any musical instrument cannot get themself a chair at Carnegie hall, then there is something wrong with the place. 

Simply put, you need to understand if there is enough room for you to grow, given your skillset.

13) Will I Be Learning Something New? 

You can understand this by looking at how diverse employee culture is at the organisation and how many perspectives are being discussed while solving a problem. 

For instance, if employees are merely informed or their opinion considered while discussing the product strategy. This will help you understand how much of your say will be actually heard and how much of it will go overheard. 

14) How Big Is This Startup? 

This is important to understand how much their mention will affect your CV for future roles. Additionally, it will be better if you can dig through the founder’s life and be clear if they don’t have any dirt in the past which can potentially damage your future opportunities.

15) What Kind Of People I’ll Be Networking With? 

Networking can take you to places and this has been successfully established in the present world. From the kind of people you interact with daily to the ones you get to see on a few occasions, assessment is crucial. Your network not only impacts your daily life but it also shapes up your outlook about the future and your wants. 

Ask yourself, what kind of people will you be networking with? Will it help you in future?

16) Will This Get Me To My Destination? 

Do you simply want a higher position in the same company or want the same position in a different company? Evaluating the present offer in terms of where you want to be in the future is essential.

Now, for the culturally enthusiastic and provoked people, the next section belongs to you. 

Cultural Diversity And Socialising

The present generation pays much more importance to their environment than the previous generation. What sets them even more apart is a noncompromising attitude when it comes to jobs that do not cater to their interest and aspirations. If you are someone who can not fit in a standard work environment but want more flexibility, then the next section will help you make a clear choice. 

Questions To Assess The Company’s Values

The workplace culture manifested by any company lies in its mainstream policies that guide the work environment.

17) What Are Their Core Values? 

These values go beyond the website’s homepage and can be noticed in the day to day meetings and conversations.

Assess if they value their employees as much as they value work.

18) How Are These Values Reflected In The Company’s Policies? 

If they consider their values while framing policies for the organisation, you know you are in the right place. 

19) Who Can’t Fit Here?

Even the most influential people will sometimes have to give up in front of a company that stands firm on its core values, and that in turn says a lot about their preferences. 

Now, you are required to understand the communication style that flows through this organisation. 

Questions To Assess The Communication Style

How informal and formal communication takes place into the organisation and how much leverage they are ready to provide. 

20) What Is The Scale Of Socialising 

How employees socialise with each other and how much they tend to converse in between, will help you understand if you can fit in.

21) How Communication Takes Place In The Hierarchy? 

If there is space for one on one conversations without following a fixed chain or this chain can never be broken. Such a network is crucial to understand how your concerns will be addressed by whom.

You can even look out for how the organisational feuds are handled. If a certain employee has a problem with his immediate superior, then how can he/she reach out for redressal. 

22) How Does The Company Influence Socialising In Its Space? 

The kind of social events a company organises and how they encourage employees to participate. 

You need to further assess how you can fit yourself in such a circle. For instance, being an introvert, handling weekly social gatherings can be a major trauma for you. 

Level of flexibility

This is crucial to understand if your lifestyle will be able to mold according to the company’s policy and how flexible are they willing to go with their employees. 

23) Does The Company Promotes ‘Work From Anywhere’?

Work from home and work from anywhere are some of the new important factors to consider while joining a company. Do clear out your doubts about such norms with the company.

24) What Is The Vacation Policy?

If you have a wanderlust, this might be the deal maker or breaker for you. 

Once you are sorted with this list of questions, you simply have to take your final call. 

Final Word

There will be times when you won’t be able to ask the employer all the questions you have in mind. In such cases, it is a good practice to connect with existing employees and clear your doubts before committing anything to the company.

Go On, Tell Us What You Think!

Did we miss something? Come on! Tell us what you think about our article on questions to ask before joining a startup in the comments section.

No successful entrepreneur ever said that building a company was easy. So let’s be honest about how brutal it actually is?

Why did Kate Spade, the founder of the $46.5 million company Kate Spade bags; Mao Kankan, a successful entrepreneur who founded Beijing Times Majoy Technology Co. (valued at $75 billion); and $70 billion company Café Coffee Day’s founder, V.G.Siddhartha, ended up taking their own lives?

If you are an entrepreneur, you probably are living with stress, anxiety, and burnout constantly. A recent study by Michael Freeman stated that 49% of all entrepreneurs at-risk of at least one mental illness. The same study also proved that entrepreneurs are:

• 2 times more likely to have suicidal thoughts
• 2 times more likely to be hospitalised for psychiatric ailments

Why Entrepreneurship Affects Mental Health?

In the words of Michael Freeman –

Who in their right mind would choose to be an entrepreneur? The barriers to success are virtually unlimited and most startups fail as a result.

Entrepreneurs have lower initial earnings, lower earnings growth, lower long-term earnings, greater work stress, and more psychosomatic health problems than employees. Why would anyone voluntarily accept the longer work hours, fewer weekends and holidays, more responsibility, chronic uncertainty, greater personal risk and struggle, and greater investment of emotional and physical resources required to be an entrepreneur instead of the security and long-term rewards of having a career? By conventional standards choosing to be an entrepreneur is an exercise in bad judgment.

Entrepreneurs have to multi-task amongst numerous roles and are repeatedly disappointed because of several factors like –

Lost customers, disputes with partners, increased competition, staffing problems, etc.

…all while stressed to make money.

So it shouldn’t come as a surprise that entrepreneurship involves great levels of anxiety compared to other works. But the picture does not end there. Here are some scientifically researched reasons behind the increasing mental disorders in entrepreneurs:

Innate Character Traits

People who choose entrepreneurship as a career possess certain traits like high energy and enthusiasm and they experience all emotions very strongly.

But the flip side to such inner character traits is that entrepreneurs experience positive and negative emotions to the extreme. They are more likely to have strong thoughts of depression, despair, hopelessness, and worthlessness powerfully.

Obsession

A psychologist at John Hopkins published a book on how most entrepreneurs are so intensely obsessed with their work-life that they turn into hypo-maniacs.

Hypo-mania is a psychological state with increased activity, less need for sleep, racing thoughts, and obsession with a single activity. When an entrepreneur marries his work-life and gets obsessed with the business, s/he is a potential hypo-maniac. Such an intense focus and obsession with is a leading cause of poor mental health amongst entrepreneurs.

Alienation From Social Life

Poor social relationships have become a characteristic of a 21^st-century entrepreneur. Even the World Health Organisation and National Institute of Health has identified social relationships as the most important social determinant of life. But the rigorous nature of a startup causes founders to spend lesser time with family, friends, and significant others. They are required to re-locate away from their support networks for strategic reasons. They may stretch a 24-hour day to fit in 30 hours of work just to rise to the top.

As a result, the focus on work grows stronger and other supportive relationships get weaker.

“I Am My Company” Syndrome

Entrepreneurs may treat their business so near and dear that it becomes a synonym for their self-image. The line between themselves and their companies starts to get blurry. But why does this lead to mental health issues? An entrepreneur would say –

“I am just being passionate about my work. I created it and it creates me. We define each other.”

Unfortunately, this is a very common but unhealthy way of building a business. In such cases, people begin to feel company failures as personal failures. The tiniest instances like losing a customer contract or something huge as receiving a “no” from an investor feels like an extremely personal rejection.

Financial Risk

One of the biggest contributors to mental disorders amongst entrepreneurs is the financial risk of starting one’s own business from scratch. Entrepreneurs may have to go months pouring personal capital into their businesses without receiving returns. A certain amount of “skin in the game” can be encouraging, but founders often give in too much turning it discouraging.

Barriers To Mental Health Experts

Mental health resources, even in the 21^st century, are not available for everyone. But access to mental health resources is even more limited for entrepreneurs because traditional employees may have a counsellor at their office but entrepreneurs have nowhere to go; mostly because entrepreneurs:

• Don’t factor in therapy in their budget
• Feel that stress and worrying is the way of an entrepreneurial life
• Are unaware of the importance of mental health for a successful business
• Are scared of the stigma attached to therapy, counselling, and psychiatric treatment

Entrepreneur Mental Health Statistics

Entrepreneurs are:

• Twice more likely to have lifelong depression
• 6 times more likely to have Attention-Deficit-Hyperactivity-Disorder
• 3 times more likely to be addicted to toxic substances
• 11 times more likely to be bipolar (extreme happiness – extreme anxiety)

Despite these intense statistics, a small 15% of entrepreneurs actually report their mental illness. It is high time that the entrepreneur culture addresses mental health and the growing mental disorders amongst their community.

How Entrepreneurship Affects Mental Health?

About one-third of entrepreneurs experience at least one mental illness. Is it just a coincidence that the most brilliant minds struggle the most?

Research says otherwise.

Here’s how entrepreneurs are more prone to mental illnesses:

Entrepreneurship Depression

Entrepreneurs are known to be twice more likely to suffer from depression than traditional employees.

Depression and sadness are different among entrepreneurs. Sadness comes in waves and is more general. For instance, if an entrepreneur has to sell off belongings to raise money, s/he might get sad for a while. That shouldn’t put him/her into depression.

Depression is more prolonged and intense. Risk-taking fails, unachieved goals, and stagnated progress, become fertile ground for entrepreneurial depression. Entrepreneur depression, similar to other depressive conditions, reduces concentration and affects good decision-making. As a result, things can go from sadness to depression if not treated.

Entrepreneurial Stress

Entrepreneurial stress is an intense feeling of emotional or physical tension. It usually occurs at the beginning of starting one’s own business. Since start-up businesses can change drastically and suddenly, stress and anxiety begin to creep in. Stress can be of two types:

• Acute stress: Acute stress is when you feel tension for short bursts of time. For instance, if you fought with a friend, family member, or an employee, or if your employee did not turn in work on time, etc.
• Chronic stress: Chronic stress is when you feel tensed and anxious for prolonged periods. This happens very often to entrepreneurs as they are pre-occupied with financial risks, competition, uncertainty, and loneliness.

Acute stress is seen as positive for the mental well being of entrepreneurs. But if an entrepreneur starts to give in more than s/he can handle, acute stress turns chronic. Chronic stress is not known to be a mental disorder but it is a sign of poor mental health because it brings feelings for hopelessness, aimlessness, and un-importance for an entrepreneur.

Entrepreneurial Burnout

Burnout is a very common and unaddressed mental ailment amongst entrepreneurs. A study by the Harvard Business Review showed that more than half the respondent entrepreneurs experienced levels of burnout that were even higher than burnout by athletes and college students. The merciless and tasking work schedule of an entrepreneur often leads to chronic stress, which soon turns into burnout. Symptoms of burnout for entrepreneurs include:

• Feeling tired regardless of how much sleep you get
• Your inbox is always full but you never feel motivated enough to address all aspects
• Less excitement about your day from the moment you wake up
• Reduced inspiration to create proposals and reach out to investors
• Hiring more employees than your capacity and dumping your work on them
• Physical symptoms – Headaches, dizziness, nausea, stomach aches, increased perspiration, etc.

Many entrepreneurs often dismiss burnout symptoms as just a part of a hectic schedule, but in reality, it is not a schedule issue it is a mental health issue.

Entrepreneurial Substance Abuse

Entrepreneurs are at a higher risk of substance abuse than the general population. They face continual and significant levels of stress, loneliness, and risk of failure. As the head of an organization, an entrepreneur ought to monitor the behavior of others to ensure that it doesn’t harm the business, but there’s no one to do the same for them. These feasible elements come together to create a perfect environment for substance abuse.

How To Avoid Mental Disorders As An Entrepreneur?

Entrepreneurship can be a wild ride, with ups and downs. But here are common practices entrepreneurs can do to help prevent their lives from spiraling out of control.

Nurture relationships

Relationships with friends and family members can be very powerful weapons to fight mental disorders.  Entrepreneurs could join a peer group, engage with old friends, go out on date nights with their significant other, and make new friends. Not only are these fun but also a great reminder to entrepreneurs that they have a separate existence from their work.

Turn To Mental Health Resources

Entrepreneurs must always avail of the option of regular mental health check-ups through short counselling sessions and psychometric tests. Entrepreneurs must factor in the costs of such options in their budget and actively engage in asking for help. This is not only important for one’s well-being, but research has proven that stronger mental health increases business turnover and productivity. This is simply because stronger mental health prepares you to critically, calmly, and analytically deal with new challenges thrown at you.

Work On Physical Health

One of the best ways to fight burnout is by being physically active. According to the Anxiety and Depression Association of America, “Scientists have found that regular participation in aerobic exercise has been shown to decrease overall levels of tension, elevate and stabilize mood, improve sleep, and improve self-esteem.”

Exercising doesn’t refer to vigorous training and running marathons. But entrepreneurs must factor in at least 30 minutes a day for fitness. This can include simple yoga, stretching, running, walking around the neighborhood, etc. Another great way to develop an exercise regime is by engaging in your favourite sport. Get to learning a new sport or honing your skills for a sport you like.

Work On The Business, Not In It

One of the most common issues leading to burnout is attaching oneself to one’s business. Entrepreneurs may find their own identity wrapped up in their business. The best way to avoid this is to set boundaries between the business and the self. Begin by trying to maintain a journal or a schedule where you write about some personal time for yourself. Take this personal time to think about your personality, your qualities, your hobbies, your childhood, etc. Make sure that you have a definition of your own and your business has a different definition of its own. Such boundaries will help you realise that you work on your business, not within it.

Limit Your Finances

Entrepreneurs might pour too much of their monetary holdings into their business. It’s natural to aim for financial independence. But the financial health of your business can turn too overwhelming. If you do not plan and distribute your finances well, it may dictate where you live, how you live, and how your family lives too.

Therefore, you must stick to rigid financial planning. Plan out the investment sources you would rely on, plan out how much you can pitch in, how much your family can pitch in, but remember to set an upper limit Create a back-up financing plan too, but don’t cross the upper limit.

Divide And Delegate

Entrepreneurship is all about building a business by yourself from scratch. Right?

Wrong! The startup stage is actually a ripe time to distribute responsibility and delegate. Imagine this, if you were a sole proprietor, then delegating work means passing off book-keeping to an accountant or employing a virtual assistant for the task. Studies have shown that business quality and productivity rise as work is planned and delegated. If you micromanage you might end up over-burdening yourself with work, blaming yourself for all business issues, and such events may trigger stress, anxiety, and depression.

There is no perfect way to live the entrepreneur’s life, but the way to survive it well-enough is acknowledging and looking after one’s mental and physical well-being. Renew yourself and your perspective and start over. Starting over is a portion of the process of starting up. The entrepreneurial community must understand better than anyone else.

Go On, Tell Us What You Think!

Did we miss something?  Come on! Tell us what you think of our article on entrepreneurs and mental health in the comment section.