I've been approached by a funded startup that is developing a web-app and who seem to have the sole intention of making a product so that the company will get purchased by a large corporate/whoever in a few years?
Any thoughts on working for this type of startup?
Cheers
Justin
In short, consider it a job - any payout from the acquisition will be minimal. Evaluate the job based on the work you'll be doing and the immediate compensation you will receive, and even more than when working for a stable company, be prepared to move on whether by your choice or events beyond your control.
Just remember to set your expectations correctly about cash/equity incentives: http://www.bothsidesofthetable.com/2010/09/06/how-to-discuss..., http://www.bothsidesofthetable.com/2009/11/04/is-it-time-for...
wondering if any of the original developers stay on in the next/purchaser company ?
On the one hand, it _could_ turn out wonderfully for all. Spend a few years playing with some fun tech, don't have to worry too much about profits/long-term viability - just keep enough cash to operate, and exit with a nice chunk of change and move on to the next.
On the other hand, it's a VERY risky strategy -- it doesn't necessarily build a fundamentally strong business (it certainly might though) and if the exit doesn't happen (or doesn't happen quickly enough), the company could very easily vanish with nothing left to show for itself.
I personally prefer the more fundamentally sound approach - build something great, viable, and long-term successful. Maybe you exit with a huge acquisition. Maybe you exit with an IPO. Maybe you don't exit and reap profits for years to come. But that doesn't mean that the flipping approach doesn't have the potential to reward or should be avoided (heck plenty of people are doing it and making a ton of money).
I'd say the key points to consider are these:
1. Do _you_ believe this is something that one of the large corporate/whoevers will want to buy in a few years? Or do you think that's an excuse for a lack of a viable business model?
2. Do you like the project? Regardless of exist, it'll be your home for a few years, so you should enjoy the work and make sure it will help your long-term aspirations beyond the next few years.
3. Since the goal is a flip, that means that equity is key. Will you have enough equity to reap the benefits? If the flip doesn't happen, will you be paid enough to make the time spent worthwhile?
Just consider all angles and make sure your interests are looked-after. That's the best advice I can offer.
If the pay is great, and you don't get locked into chasing the dream of a big payout in 3-4 years, and it'll be technology you want to work with, why not?
If it's a good job opportunity otherwise, just don't marry yourself to the work, as its likely to burn you down the road.
If it turns out to be a bad move, or you're otherwise wary, just keep your feelers out there and don't be afraid to jump ship to a better opportunity if you see fit to do so.