What questions should one ask the founders before joining them ?
A company of just 10 people wouldn't have a lunchroom. Before you accept an offer - preferably before you interview - explore the neighborhood around the office, to determine whether there are good places for lunch, or for coffee or beer, if that is to your taste.
I would not consider working for a big company unless they had a good lunchroom. It's not that I can't go out to eat, or bring my own lunch, but there's something about a lousy lunchroom in my workplace that I find quite depressing.
If I drive, can you cover my parking, or alternatively will you cover public transit?
Do you have an employee library? (Most companies don't. That is the essence of stupidity. There should be at least a few technical books, for the languages, tools, platforms and APIs you use.)
Have any of your products been reviewed in the trade press? (Better if you find this out on your own, but you might not be able to find the reviews. The products might have online reviews though.)
Don't ask in the interview, but search around for dirt on the company principles. Like maybe they robbed a previous company blind, then invested their ill-gotten gains in the firm you are interviewing with. I actually worked for one such company.
Do you provide on-the-job training? (Even if you have the chops to fulfill your job description, work will get uninteresting if you don't get to learn anything new on the job.)
Do you pay for conference tickets or travel?
"Like maybe they robbed a previous company blind, then invested their ill-gotten gains in the firm you are interviewing with. I actually worked for one such company."
Is it just a background check on the founders ?
Also inquire with their coworkers or subordinates at their previous companies. Possibly you would want to do that anonymously, say by using a pseudonym when posting to a message board to social networking site.
In the "boiler room" case, I simply assumed I'd get a private office because everyone in the same hall as my manager had a private office. I simply assumed I'd be on that same hall.
Rather than explicitly asking about where you'd be sitting, what the lunch room is like and so on, perhaps it would be more diplomatic to request a guided tour around the facility.
It's quite common to be taken to lunch during job interviews. If that doesn't happen, maybe it's because the lunchroom sucks.
For example, on your way to the room where you will be interviewed, have a look at the expressions on the faces of the employees. Do they look happy? Or do they look like "lifers" or "wage slaves"?
Do you see any technical books out in plain sight? You might not see the actual library, if there is one, but you might see books on the desks of the engineers.
Ask about false starts with co-founders or employees that just didn't work out. Try to get a sense of how the founder makes tough choices and deals with interpersonal conflict.
Do I think the company will get traction and grow? If I am employee #7 and I can credibly see how this becomes a company with 100 employees then there is room for me to grow and succeed with the company.
When the pressure is on, how does the founder treat employees? Is he quick to sacrifice their interests for his own? Does he take responsibility or is he quick to shift blame?
Is there a good fit for my skills such that I can make a noticeable difference in technology and business outcomes for the company over the next couple of years?
* You have to pay for the options. You can negotiate to add this cost into a yearly bonus or salary.
* You have to pay taxes on the options. This is a bit complicated- if you sell them within a year then you pay normal income tax. If you sell them after a year its long term capital gains. There may be some upfront tax concerns due to the difference in the price you paid vs. the amount the options are worth. Definitely talk to an accountant before negotiating so you understand this, and after you accept an offer so you don't mess up the taxes.
* Most contracts specify that the options expire when you leave the company, so if you quit or are fired make sure to buy any options you want then and there. Build in a grace period into your contract (i.e. I have 1 week after leaving the company to actually purchase any options I've received).
* If you leave the company before a year is up, you don't get any options due to the 1 year cliff.
* Companies will know what % of the fully diluted stock pool your options represent. This pool includes all outstanding stock that founders or investors own, and options grants. It can and will get diluted as companies raise money. You'll never own less options, but the founders may elect to create more shares of the company to sell to future investors, which means you own a smaller %. This is ok though- the idea is you own a smaller % that is more valuable due to the new investment and opportunities it allows the company to pursue.It might not be such a bad thing if your stock gets diluted, if by doing so you attract the RIGHT KIND of investment. Unfortunately, VCs aren't always clueful.
I'd recommend having a lawyer review all your contracts, vesting documents, etc initially and any future documents you are asked to sign.
Keep in mind not many startups are a home run or a rocket ship so usually it won't matter but you don't want to be on the outside looking in if it does take off.
Good luck in 2015.
How many shares have actually been issued?
Is this founder's stock, or from a subsequent series? (I don't fully understand how this works, but there are ways that one can have fewer benefits from different series of stock - Common Stock, Series A, Series B and so on.)