Information, helpful advice, and commentary about topics relevant to relaunchers.

Work for an Entrepreneur Without Getting Burned

Follow these steps to ensure a good working relationship from the start

I received the following e-mail from one of the attendees of our iRelaunch Return to Work Conference:

“I’ve run into what seems to be a couple of good career opportunities with employers of small, growing companies who believe that I could help them grow and develop their businesses. The opportunities are essentially what I’d make of them…both of these entrepreneurs have decided that they could benefit from working with me, but have left the ball in my court to propose a position and compensation structure. I’m having challenges in figuring out the compensation structure because I’ve been out of the workplace for awhile and I don’t particularly know what I’m worth. In addition, because both of these companies are small and growing, they likely can’t pay me what I’m worth, so it might make sense for me to have a base salary plus some kind of performance-based incentives. I’m essentially trying to figure out how to structure a compensation package that’s affordable for them, but that reasonably compensates me for what I can offer them.”

I decided that it would be hard to give her advice without knowing more about her situation so I set up a time to speak with her.  Here are some of the “takeaways” from that conversation:

  1. Find out how long the entrepreneur has been trying to build his business. If the entrepreneur has been at it for more than five years, even he’s only been working on a part-time basis, chances are there’s a reason why he hasn’t achieved meaningful growth. It may signal that the entrepreneur is unwilling to invest any capital into his venture or is so difficult to work with that he hasn’t managed to attract people to his cause. Don’t fall into the trap of thinking you’ll be the one to succeed where he or others have failed. 
  1. Find out if he’s hired any other consultants or help of any kind and what happened to those people. If they’re still working with him, that ’s a great sign, and you should definitely talk to them about what their experience with him has been.  If not, you want to find out why not, ideally by talking to those people directly. Sometimes there are legitimate, benign reasons why the professional relationship fell apart, but many times it’s because the entrepreneur is extremely volatile, demanding, or unrealistic about his venture’s prospects.
  1. The ability to execute is more important than the brilliance of the idea. This follows the same theme, but basically it’s much more important to do due diligence on the entrepreneur than to spend hours analyzing the market opportunity, the product, etc. He can have the greatest idea under the sun, but if the answers to questions 1 and 2 are not positive then working with this person may only bring you heartache. Conversely, a prosaic business in the hands of someone with the right attitude and character could reward you both.  

    For example, I advised the woman who wrote me that I thought she’d be much better off trying to work with a construction guy who had employees and a viable business who wanted her help in entering a new sector of the marketplace with which she had experience than with a “brilliant” lawyer who had been laboring alone for years on an “exciting” side business involving green energy.
  1. If you still want to move forward, start small; propose a project or a 1-3 month trial period. That way, you get to try each other out. You can find out how the entrepreneur is to work with, and he can find out whether you really add value. If the project or short-term trial goes well, then you’ll be in a much better position to craft a longer term arrangement. If not, then you can extricate yourself with both your and the entrepreneur’s dignity intact. (If this happens, and you think the entrepreneur would give you a decent reference, you can always include the experience on your resume under “consulting.”)
  1. If the entrepreneur seems unwilling to risk even a few thousand dollars on a project or trial period, then proceed with caution. Even if you’ve been out of the workforce for a long time, if you have strong academic credentials and relevant prior work experience, then don’t undertake these kinds of assignments for peanuts. If an entrepreneur isn’t willing to pay you reasonably for a project or a trial period, it may mean that he doesn’t have the resources to compensate you reasonably on a more full time basis even if you do add value. 

    That’s not to say you shouldn’t take an unpaid internship. Internships are great if they’re with an entity that clearly will be able to compensate you if you’re hired full time, or if you’re young and inexperienced and simply looking to put something on your resume, or if you’re changing fields and don’t have relevant experience to offer. An interesting take on the unpaid internship model is the Executive in Residence, which my iRelaunch co-founder Carol wrote about in a previous blog.

    But a seasoned professional “interning” for a lone-wolf entrepreneur smacks of exploit at ion. If an entrepreneur is seeking your time because he thinks you’ll add value quickly, then make sure he’s willing and able to pay you for it.

Wondering what happened to the woman who wrote me? Just last week she reported: “I had some questions about the construction guy’s character; and the green energy entrepreneur was negotiating so fiercely over the terms of my trial period that I decided I would never be able to work for him. Guess these weren’t the right opportunities.” 

My reply: “Don’t feel bad. I think you’ve saved yourself a ton of aggravation.”

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