Moving to a start-up? Fasten your seat belt

Four managers who left corporate IT for start-ups tell you what to expect.

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Money will matter

Baldly stated, when it comes to start-up capitalization, you want to ensure that your new company has enough money to pay you and to adequately fund an IT operation, to say nothing of financing its line of business.

Street advises that IT people clearly understand the finances behind a start-up before they sign on. "To me, the single most important thing to determine about a start-up is whether investors are willing to put in enough funds for it to succeed, and if the investors are truly committed and willing to give it a chance to succeed," says Street, who watched The NIC Co. pay off its bills and close up shop in 2003 after its sole investor, Oracle CEO Larry Ellison, pulled funding during the dot-com meltdown.

It's not just the company's finances that matter; yours do too. "My advice to anyone considering a move [out of corporate IT] is to learn the business side of stock options," says Sharer. "A lot of people coming from IT are naïve about that."

If options are part of the compensation package offered by a start-up, it's key to understand the type of stock options you're receiving because they can affect your tax status, Street says. "It is really best to consult a lawyer or accountant" if you don't understand what you're getting going in, he advises.

"And don't join a start-up because you want to make a lot of money," Sharer adds. "Many start-ups fail. I'm not wealthier now, but I'm happier because I feel I'm doing something important and meaningful."

You'll work harder, but your work will matter more

After a year of working for a start-up, Cramer says his advice to workers considering such a move would be to "make sure [you] can really handle the environment. In a start-up, you have to be innovative and creative, and you have to be able to produce," he says.

Cramer had lots of experience in infrastructure support and had previously done some programming, but in his new position, he's had to put all that together and more. "Moving to a start-up and having to coordinate, review and collaborate on all aspects of the code life cycle -- not to mention the daily beatings associated with breaking the builds -- that was all very new," he says.

What has Cramer learned from that experience? "You must be open to others critiquing your work, which includes having a brilliant idea that you worked on for a week set aside because the product needs to go in a different direction," he says.

For Sharer, who once worked for a defense contractor, working at a start-up was his chance to align his business goals with his personal beliefs. And while he'll never say never about returning to corporate life, "my goal is to never again have a job that is not aligned 100% with my values," says Sharer, whose new company is focused on the environment. "If you're looking for a company that's in alignment with your personal beliefs, odds are that it is going to be a smaller company."

In the end, all four IT managers say working for a start-up is the quickest way to leave the frustrations of the entrenched corporate workplace far behind.

"One of the frustrations for me at Compaq was it was pretty much impossible to really make a difference," notes Street. "When there are 80,000 people, individual contributions are largely meaningless.

"At a start-up, your work seriously matters, which for most of us brings great satisfaction."

Gina Smith, a co-founder of start-up The NIC Co., is the co-author with Steve Wozniak of iWoz: How I Invented the Personal Computer and Had Fun Along the Way (W.W. Norton, 2007).

Copyright © 2008 IDG Communications, Inc.

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