We can learn some good lessons from our venture capitalist counterparts when it comes to evaluating the risk of new management employment opportunities at startups.

The most popularized risks of ventures, when evaluated for investment opportunity, are broadly captured within the following categories:

• Market risk – is there a buyer for this product? Has this company been able to generate traction, grow their customer base, and is there a path toward larger adoption?
  • Growth rates, customer feedback, hiring pace can be good indicators
• Technology risk – how hard is this product or service going to be to build and how long will it take? Does the product & engineering team have the background and/or skills necessary to build it?
  • Think mobile gaming app vs. self driving technology on the 1-10 difficulty scale
  • Likely the most difficult to judge from the outside as companies are going to be reluctant to share their inner workings at the interview stage
• Execution risk – do they have the right people? Do they have the right go to market strategy? How is the business model working? Oh and can you be one of the people to come in to bring this risk down?
  • That’s where the 💰💰💰 is for managers leaders

The above captures a lens with which to view the potential financial upside of your opportunities. BUT, one might argue the much more important piece of the puzzle is to look at the role from an employee perspective, even at the mid-senior level of a company.

• Org chart risk – how many layers of decision making are you removed from the top? More layers, less leverage. Less leverage, less decision making ability and *less learning*
  • If you’re in Customer Success does it roll up to a VP level function or does it report into Sales? Departments reporting “through” each other can be tricky
• Colleague risk – are you going to be able to work with these people every day? Are they likable or fun?? Can you learn from them? Life’s too short to settle in this category
  • Growing your network is a secret weapon of future career opportunities so working with people who you can learn from and grow with is a HUGE career accelerator
• Business risk – related to execution risk but from the team & employee perspective. Or, in other words, how bumpy is this ride going to be?
  • What is the acumen of the leadership team? Has anyone done this before? Founders, execs or otherwise? Aspire for teams that desire operational excellence!
  • Is there plenty of runway? Positive gross margins? Expansion, upsell & creative growth expansion built into the model?
  • All points above sort of don’t matter if this one isn’t up to snuff.. It’s too much to bear otherwise

In summary, this evaluation is focused on the company and role upside of the opportunity – it won’t factor in important factors like cash compensation, commute, benefits, etc etc which frankly might matter more. And that’s OK. Besides, when it comes to all this…it’s better to be lucky than good anyway.

This post’s original inspiration comes from Tomasz Tunguz, a VC at Redpoint Ventures who wrote about the 11 Risks a VC Evaluates as well as this recent tweet from earlier in the week: