Taking an unpaid job or internship at a startup can be a huge boost to your startup career. Still, it’s not a decision to be made lightly.
Putting aside the legal aspects of the discussion for a moment, there are three questions you need to ask yourself before taking an unpaid internship or job at a startup.
What’s the level of funding or revenue at the startup?
If a startup has raised hundreds of thousands or millions of dollars in funding or is bootstrapped with a similar level of revenue they should be able to pay you something for your efforts should they want to bring you on board.
Keep in mind that the ‘something’ might not be exactly what you had been making at your previous job, especially if you’re making a shift into startups from a larger company or more lucrative industry like finance or consulting.
But what if you want to work with an early stage company that’s not yet raised any money and isn’t generating revenue?
Well, they legitimately may not be able to pay you. After all, they’re not even paying their own employees and founders at this point. If that’s not kosher given your financial situation, moonlighting for free part time while you keep your day job may be the right option.
How strong is the founding team?
Working with an awesome founding team, even for no pay, can alter your startup career trajectory in a major way. For example:
- A great founding team will have a strong network in the local startup community among other startup founders and investors. If you do good work, the founding team will be inclined to open that network to you in the future.
- You”ll learn a lot indirectly and directly from a great founding team, because they may actually know what they’re doing. 🙂
- Founding teams tend to start other companies together, and they bring employees they’ve worked with in the past along for the ride.
Exhibit A: The Paypal “Mafia”
What traits are common to strong founding teams? These two are probably the most important:
- Members of the founding team have worked at “successful” startups in the past.
- Members of the founding team have previously started a “successful” startup.
One small problem, though:
You can’t just look at how much money a startup has raised, or if a startup was acquired by another company, to tell if it was or is successful. You really have to study the company to get conviction on their “successfulness”. (*Now hiding from the grammar police…*)
What will you learn?
Working for free can be a great way to learn skills on the job, particularly if you’re making a transition to a function where you have little to no experience. Plus, you’ll have a chance to put some points on the board and results to point to when you look for your next (hopefully, paid!) position.
Take, for instance, an investment banker who is dying to work in startup marketing. It will be hard to find a startup to pay that banker to do marketing without them having had any marketing experience. Same goes for the accountant who wants to do product management.
But if that banker spends a few weeks or a couple of months with a startup, and is given a fair degree of autonomy in their role, they’ll pick up some of those marketing skills. And maybe even had some wins they can point to when they try to secure a paid role (at the current startup, or another one) in the future.
If you’re thinking about working for free, remember…
- Make sure you can afford it. If you can’t, moonlight in a “free” role to fill skill and experience gaps while keeping your day job to pay the bills.
- Make sure that you’re entering into an alliance that will benefit you just as much as the startup. Ask the startup for examples of other people who’ve worked for free with the company. Dig into the specifics to learn what opportunities the startup provided (i.e. job responsibilities and access to networking opportunities). Where did those people who worked for free end up after their stint at the startup?
- Be confident that the role will get you the experience you need in order to end up in a paid position soon.
