This is a continuation of this post.
In this post, I'll share my learnings from receiving an offer, onwards to signing.
Before I begin, some readers had asked about organizing methodology. I recommend Huntr--it's quite robust and customizable, and their free tier should be sufficient for most.
First off--if you haven't already, I highly recommend reading Patrick McKenzie's post on salary negotiation. It may very well be the most (monetarily) valuable post you read in your career.
The offer call is an important step in this process for two reasons:
- The call lays the foundation for negotiation. If you offer too much information up front, you can negatively impact the compensation package you receive.
- The call affects your job search timeline. Once an offer is out, companies usually don't like to have them out for too long--typically two weeks. However, companies have been known for "exploding offers," when they give you too little time to accept (<= 48 hours).
Let's start with what not to do. Some of this is also in Patrick's post, but it bears repeating.
- Do not provide salary expectations. Unless you have a substantial amount of information about the company, market rates, etc., there is very little upside in naming the first number. Consider this: companies annually pay for market-level compensation data. Additionally, they hire 10-10,000 engineers per year. You look for one job every two years, at best. Not to mention, for private companies, you have very little information at this point in regards to equity and the company's finances. The information asymmetry is substantially in the company's favor.
- Do not commit to a specific date you will decide by, if at all possible. Especially if this is one of the first offers you've received, and you still have some interviews in the pipeline.
What you should do:
- Thank the recruiter/hiring manager for presenting the offer, and express your excitement for the opportunity!
- If you aren't familiar with startup equity, the Holloway Guide to Equity Compensation is the gold standard. You don't have to read all of it, but I recommend having a thorough understanding of how equity compensation works.
- Make sure you ask any questions about the offer. Especially about equity, since often you won't be given enough information by default. It's up to you to get that information. At a minimum, for a private company issuing options, you should know:
- Percentage of company being offered
- Number of options being offered
- Fully diluted number of options
- Vesting schedule and cliff, if any
- Last 409(a) valuation, also known as FMV
- Last preferred price
- Whether the company offers early exercising of options
- Exercise window after leaving the company. This is important because exercising stock options can have significant cost and tax implications. At most companies, if you leave before the company before a liquidation event, you will only have 90 days to exercise your options.
- Discuss your timeline with the recruiter. I tried to be as transparent and honest as possible here: "I'm really excited about this opportunity. This is a big decision for me, and its important to me that I get it right. I'd love to be able to see my current interview processes through so I can make an informed decision about what's best for my career". Let them know when you expect to be done with those processes, but try not to commit to a specific date. Processes can take longer than you expect, and it's easier not to have a set deadline.
- Let every other company you're interviewing know that you received an offer, and, to be considerate of the other company's time, you'd love to move along in the process as fast as possible. This is particularly useful if the company is moving slowly. In my experience, companies can move surprisingly quickly if need be--especially since they have an even better signal now of your competence. A couple of examples here: I interviewed at Google, got team matched, and passed the hiring committee within the space of a week. At another company, I scheduled an onsite within two days of initial contact (through Triplebyte), and got an offer two days after that.
Evaluate Your Opportunities
Now that a company has decided they want you to join them, it is your chance to decide whether you want to join them. Especially if you have multiple offers, this due diligence is crucial. Here's what I recommend:
- If you know who you'll manager will be, talk to them! This isn't always set in stone, but if available, you should speak with them. Your manager will have a significant impact on your experience at the company. I also recommend talking to your prospective manager's direct reports. You can ask them about the team culture, the manager's managing style, etc.
- Talk to as many other people from the company as possible. The recruiter may suggest some people. Depending on the size of the company, this could be leaders in the company (VP of engineering, CTO, even CEO), and/or your peers. It's also important to reach out to people yourself (outside of the recruiter's suggestions) and ask them directly about the company and any questions you may have. Culture queries is a great resource here, as well.
- Think about what matters to you. Rank them. For example, what mattered most to me was:
- An ethical company that had a strong mission I could support
- People I felt I would enjoy working with
- Rapid growth, with potential to grow into a leadership role
So, I had 9 offers. Clearly the natural next step at this point for me would be to create a bidding war for my employment and get a monster compensation package, like Haseeb, right?!
I hate to disappoint you, dear reader, but compensation was a secondary factor for me. Don't get me wrong, it was important--I wanted to earn a competitive, market-rate salary. However, I felt that at this stage in my career, the most valuable part of my job was not the compensation, but rather what I'd learn and experience along the way. Furthermore, if I was honest with myself, after a certain threshold, additional compensation wouldn't improve my quality of life or happiness.
If you are looking to maximize compensation, I recommend Haseeb's post above. He also has another post here.
So, I went about my decision differently. I took the time to dive in to each company, to rank it among the factors I cared most about. I weighed my onsite experience heavily, most importantly the people had I met.
I had a difficult choice on my hands. I had to start narrowing down the best opportunity for me.
First, something I realized as my interviews went on was that a smaller company fit me better. My reasoning boiled down to a handful of things:
- First, I see the impact I personally made on the company. This would have been much more difficult at a large company.
- I wanted to work beyond my job description. I wanted to work on recruiting initiatives, share my opinions on everything from product roadmap to marketing.
- I wanted a fast-paced environment, where I could learn at an accelerated rate.
- I wanted minimal beauracracy and maximal freedom
- Brand or prestige had little weight. While having Google on my resume, for example, would surely have made it easier to get interviews in the future, I didn't have a lot of trouble getting interviews in this job search!
So, that narrowed it down a bit. My options were Alto Pharmacy, Flexport, Instabase, Nextdoor, and Newfront Insurance.
Each company was attractive for its own reason. Each had either already achieved great success, or was hitting what I felt was an inflection point in the company. However, there was one company that had really impressed me: Alto Pharmacy.
In the coming days, I'll be publishing another post on why I chose Alto. But to summarize, it was unique combination of massive business opportunity, earnest founders, impressive growth, mission-driven culture, and societal impact.
I did negotiate, but very transparently. I shared my offers from similar companies with Alto and asked them to get closer to the best offers I had. While it required some back and forth and executive approval, I was more than happy with the compensation package that resulted.
The only remaining task was to let the other companies know of my decision. It's important to do this well. I like to give the recruiter some background on what influenced the decision. Furthermore, it helps build a long-term relationship with the recruiter. I also gave them detailed feedback about their interview process if they asked. Remember, the tech world is shockingly small. A few extra minutes of care can make a world of difference in the future.
I learned a lot on this journey, but if I had to pick the most important learning, it would be how valuable choice is.
When you have fewer choices, then you have less to compare, evaluate, and learn from. The more opportunities you recieve, the better decision you can make on what the best opportunity for you is.
If you have any questions, please don't hesitate to reach out.