Should You Work With a Start Up?

Sacha Cohen writes for www.ework.com – a Ms.Money partner.

The life of an eworker can be pretty risky. After all, most of us don’t have the luxury of a steady paycheck or corporate benefits. Add to that the instability that can come with working with a startup, and you could be in for quite a ride. Even so, there are benefits to working with a startup: an energetic environment, plenty of passion, the chance to make a difference, and even the possibility of hitting the big time. Plus, if you work with the right company, you could get involved in some very interesting, challenging projects that aren’t always available at larger, more established firms.

Online writer Regina Lynn Preciado found a freelance editing and writing project with the Web site NetGuide Live back in mid-1996. It was the beginning of a beautiful relationship. “After that, most of my work came from my contacts. My network seemed to bounce me from startup to startup,” she says. Interestingly, she found the rates with many so-called new media startups better than at old media firms. But the skills required for such new media projects also required a wider range of knowledge, such as HTML and database publishing, points out Preciado.

The Pros, and The Cons

It takes a certain type of person to handle the typically highly charged atmosphere of a startup, especially if the company is in the Internet sector. Says Preciado, “At NetGuide Live, I learned to work in a snakepit (big room with desks; no cubes, no offices) with various types of music blasting and competing with each other, people talking and shouting, and the cloud of 50 people’s anxiety and excitement hovering above us. After that, I can pretty much work anywhere.”

Risk-adverse eworkers should probably think twice before signing on with a startup. “If you have a mortgage or a family, working for startups is going to stress you out, probably to intolerable levels. It does something to a corporate culture when you don’t know where you’re going from day to day,” says Preciado. But if you don’t have lots of financial responsibilities weighing you down and don’t mind uncertainty, a startup might just be the adventure you’re looking for.

Ironically, some of the instability can actually help the eworking cause, by increasing the number of projects farmed-out to contractors. Los Angeles-based Sofia Agras says, “Because the stock market has gone up and down so much, people are very nervous. There’s a dearth of talent out here, but [companies] are in such a big hurry, they have a hard time making up their minds. Should they spend the money to hire a person full-time when they don’t know if their company will even exist in three months? Or should they take some of their remaining dollars to get a consultant on board who can help them out of an emergency situation?”

For the most part, startups seem to be more willing to take the “risk” of hiring a freelancer. If it doesn’t work out, they’re not “stuck” with you as an employee. Hiring a freelancer is also a more cost-effective alternative to hiring an employee (not only the salary, but the benefits, insurance, floor space and other overhead!). Add to this the fact that your work can be seen as having a direct impact on the company, and that’s really rewarding.

The downside? Eworkers may find it difficult to get startups to commit to long-term projects or to commit to a working relationship at all. After all, if you’re not “mission critical,” which often consultants are not, you may find yourself at the bottom of the “accounts payable” list.

The flip side to all of this is that you can be pretty choosy about what companies you work with and how involved you want to get. Startups might make up only a small percentage of your overall client list, which is a great way to reduce the risk. Think of it like your investment portfolio. It’s best to be diversified, to mix high risk (startups) and low risk (blue chip companies with long-term track records).

Getting Started with Startups

Once you’ve decided to work with a startup, just like any other client, get all terms in writing. “Do not work without a contract,” warns Preciado. “Get a portion of the money up front. Tell the manager that you’re thrilled and interested to work with the company, but that you need a sense of how stable it is, and see if she thinks you’ll get paid even if the company goes under. If she hesitates when you ask, calmly reveal that your business policy requires 30 to 50 percent of your fee up front. Preciado also recommends that you list deliverables with dates and meet in person if possible to go over each phase of the project and make sure you both have the same expectations. If you are hourly, write in a cap. And if the fee is project based, include a phrase “up to X hours,” after which you negotiate further payment.

“Remember that you, the independent professional, are a business. You can do all this without being mean, paranoid, difficult, or troublesome. In fact, if you act professionally and businesslike, you’re more likely to impress than distress the manager,” says Preciado. “Any startup that balks at a contract is not worth your time. Prepare a boilerplate for yourself to whip out when your contact explains that the company doesn’t have a contract of its own. Set an invoicing schedule-weekly worked well for me, biweekly for more established companies.”

Marie Loggia-Kee, who had done freelance writing for a number startups, says that the major pro for working for a startup is that there are so many of them out there, and almost all need content. The downside is that not all those Web sites are willing to pay for content. “A lot of people think of the Web as being free,” she says. “The other huge issue is the dot.com slaughter. I’ve worked for several sites that have gone under-without ever publishing my work. The saving grace has been at least I’ve been paid,” adds Loggia-Kee.

If you do decide that you want to work with a startup client, make sure you know what you’re getting into. Ask questions about the company’s funding and long-range goals, check out the management team, and do as much research as you can before signing on. A bit of caution in the beginning will go a long way to helping you create a long and fruitful relationship with a company that’s just getting off the ground-but just might be going places.