Over the years, Privy got up to like 80/90 employees at peak while I was running it.
That means we interviewed hundreds of applicants to fill those roles. I forget exactly, but as the founder, I used to be VERY involved in interviewing candidates, probably until 50 employees or so.
For some roles, I'd be the first interview because it was a role I wanted to fill myself. Later on, I moved to the final round interview. Mostly as a way to actually sell the candidates my team already wanted to hire.
These were important sessions because I mostly knew nothing about the candidate aside from the fact they were top choice for my team.
So the interview structure was a bit open ended. Most of the time it looked like this:
10 minutes - Ask them about their background, how they found the role, and why they're excited about it.
20 minutes - reserved for questions they had lined up.
☝️ It's in this last bucket where things always got interesting. Entry level candidates rarely had any questions prepped. That's fine, I get it. We'd chit chat for a few more minutes then I'd wrap up.
Industry hires usually had a few surface level questions - about the product, about the competition.
But the best hires always had hard hitting questions for me, the founder. They were smart enough to be a little skeptical, and that's a good thing.
Of the hundreds of interviews I had over the privy tenure, only a handful stand out.
I like hiring for ownership mentality. Besides, pre-acquisition, every single employee becomes an owner in the business.
So if you're moving along in your interview process at an early stage-ish company in tech, here are some questions you should absolutely ask the founder in your session.
[And founders, you ABSOLUTELY need to be ready to answer these on the fly].
Are you profitable. If not, how many months of runway do you have left?
This is critical. I'm surprised more candidates don't ask. But if I'm joining a company, I'd hope that I can expect 2-3 years working there.
How the founder reacts to this one is pretty important. Ideally they're buttoned up and have a real plan on runway. Best scenario is they're growing quickly AND breakeven or profitable. Second best is something to the effect of "we have 18 months of cash in the bank assuming no revenue growth, but are hiring cautiously so that revenue can catch up with the cash on hand".
If you get a vague response to the effect of "we have a strong pipeline of series B investors and are confident we'll raise money in the next 6 months", I'd be cautious, and perhaps even push a little bit and say "ok well whats plan B if a fundraise doesn't come through?"
[Founders don't need to have all the answers here. Again, this is a startup, there has to be some risk and candidates need to get comfortable with that. But as the founder, it's your job to have a cash management plan, or a "business continuity plan", as they call it in the accounting world]
Can you help me understand how I should be thinking about the stock component of an offer?
Startups pride themselves on offering employees equity. But it's very rare that stock options turn into positive outcomes. This can be for a number of reasons. Maybe the company runs out of cash. But the company could also have a solid sounding exit, and you still may not earn anything.
Part of understanding the stock component of an offer is understanding the fundraising history. How much total has the company raised? In the most recent round of funding, what was the price per share? Has a 409A valuation been done, what was the price per share? In the funding rounds, were the terms "clean"?
I was the first angel investor in a company called Localytics. It was a hot company that at peak had $25M in revenue. They raised several rounds of funding and a total of $65M in funding.
Sounds exciting right?
They were acquired for $65M. Employees there made absolutely nothing. Earliest investors lost all their money. Unfortunately these types of scenarios, where the stock is "under water" is more common than you think.
[Founders don't need to share cap table specifics, but you ABSOLUTELY need to be ready to chat through options and the liquidation preference, if any, to help good candidates get comfortable]
Tell me about the last employee that was let go. What went wrong there?
It's not all fun and games. If you're hired into a startup, you should expect that you need to roll up your sleeves and figure things out, with little direction. Understanding from the founder where previous hires have gone wrong, and why, is important. It gives you a clearer picture of expected performance and culture.
Founders may get caught off guard here, but it will actually help ensure a good fit and clear expectations on both sides.
Another variation of this would be "if you let me go in 6 months, what will the reasons be?".
Whats your vision for this business?
Sounds obvious, but so few ever asked me this one. Not just "what is the product you are building" but "what kind of company are you building?" Is this a slow growth, profitable business you want to run forever? Is this a moonshot? Where do you want to take it?
This is the founder you're chatting with. If you don't see passion and excitement in this response, yikes.
There ya go. A few questions you should have written down for your final round interview with the founder.