How to Evaluate a Startup as a Candidate

Startups offer opportunities to engage with innovative and mission-oriented organizations and projects, but it can be hard to know how to evaluate which company is the right one for you. Recently, MCS spoke with Matt Crane, Founder of MGMT Boston, a media company that highlights top Boston startups and the talented operators that help them grow. He has 10+ years of startup experience building Customer Success & Operations teams from Series A > late stage growth and has worked for 2 Top 10 Inc 5000 fastest growing companies (AdRoll and Liftoff). Read below to learn how he evaluates startups.

Headshot of Matt Crane

“At the end of the day, joining a startup can be a really long, rewarding journey. It takes 10 years or more in some instances to see a financial return. So try to find some special people with a great product in a rapidly growing market that you can grow your career with over time.”

First, I think you need to establish a process so that you can look at various opportunities through a consistent lens as part of your evaluation criteria. Fill out a template like this (but of course make it your own) every time you want to entertain a startup opportunity:

Relevant Executives:

Founding Year:
Employees: # & x% Local
Workplace: In Office, Flexible, or Remote
Stage & Capital Raised: Series _ & $_M raised
Key Customers:
Glassdoor Rating:

Valuation (estimated): $X – $X (use this math to imply valuation). If they raise a $10M Series A and sell 20% ownership, the valuation = $50M

Additional Questions:
How did this company come to be and how is it progressing?
What problem does it solve?
Why is that important?

There’s a book that walks through the history of venture capital, aptly named VC, which highlights the different criteria with which investors evaluate startups – people, products and markets. We’ll use the same criteria and add a “personal” element. Because at the end of the day the personal aspect of things is a big decision making factor.

People: In my opinion, people are not just the most important thing, but the only thing. Marc Andreessen would differ. If you’re in the business of building relationships over a long career, trying to find the best people to work with is the most important ingredient of future success. Interesting, talented people will be doing interesting things for many years so it is probably the best way to “de-risk” your career. If you build long term relationships, those relationships are bound to pay off over a long enough time frame. Play long term games with long term people. I know it feels simplistic but, full stop, try to find the “best” group of people you can find solving an interesting problem.

Markets: When you join a startup you’re making two assumptions. First, you’re hoping that the company is going to grow, become more valuable over time, and provide career growth. Ideally, they will become a market leader. But just as importantly you’re making a second assumption that the market you’re competing in is a valuable one that will provide above market returns to the market leaders. This is probably the hardest one to nail because, if I’m writing this in 2021, you’re most likely thinking about blockchain. In 2023, it’s probably generative AI. 3 years from now? 5? Hard to predict. But the market matters. A LOT. So give that some consideration!

Products: When we talk about market leadership we’re talking about differentiated products that can form some type of moat – i.e. something that’s hard to build and compete against. Maybe it’s a technical advantage or a marketplace product that aggregates supply or demand and creates network effects. When you’re looking at any startup try to figure out which of the 7 Powers they’re using to build a “10x better” defensible product in their respective market by a talented team that can build something differentiated.

Personal: At the end of the day, joining a startup can be a really long, rewarding journey. It takes 10 years or more in some instances to see a financial return. So try to find some special people with a great product in a rapidly growing market that you can grow your career with over time. Or if you want to join a startup because you’re interested in the experience and they pay a great salary, that’s ok too!


To understand their burn rate, assume everyone makes $150k. If there are 10 people you can assume they’re burning $1.5M per year + another $500k in various expenses (~30% buffer).

If they’ve raised $3M, that gives them 18 months of runway from the time of the fundraise (give or take). 

Especially in this climate I *think* you’ll want to try to find a startup with 12+ months of runway and a plan to extend that to 24+ months.

Understand their growth metrics and the difference between real revenue growth and vanity growth. Vanity growth is “we’ve grown 1000% y/y” with no shared denominators. Real growth is “we’ve doubled or tripled revenue from a six digit run rate to a seven digit run rate over the past 12 months” – you may not get tangible figures here in the interview process but you want to have something to stand on.

Founder Mix

The best Founding teams are complementary. 1 Technical Founder & 1 Business Founder? Great! 2 Business Founders & no Technical Founder? Eh, maybe. 4 Founders working on Marketing, Business Development, Operations & Design? Tricky.

Domain expertise, 2nd time founders or other background in a given vertical often helps (but not always!)

Employee Mix

If a startup pitches itself as an AI leader with 20 employees and just 3 of those are engineers, is it really an AI company? More technically heavy than sales, and marketing heavy startups usually have a higher chance of success. It is helpful to understand if a company is growing out across its functional areas and, if not, why?

Personal Mix

  • Culture: Does their culture – in office vs. hybrid vs. remote – align with your personal working preferences?
  • Networking: The fastest way into a startup is to help them. Whether it’s something you notice on their website, a project you’ve done for school, it could be anything. Startups need help in a million different places and that’s the fastest way to get their attention!
  • Stock Options: Does the startup issue stock options (ISOs)? I would argue if you’re going to join a startup do not join if you are not offered equity. Otherwise, what’s the point of taking all that risk?

This is a little cheesy but you have one life to live. And you’re limited in the amount of things you’ll be able to accomplish in your career. So I would encourage you to find amazing work that fills you with energy and joy.

My biggest career regrets aren’t a single thing I necessarily did or didn’t do, but rather long periods of inaction where I “bided my time” because I could. You might remember your first salary and perhaps a couple financial milestones along the way. But not much more than that. You’ll remember the people you met along the way and the experiences you had together. You owe it to yourself to find work that provides you meaning and pushes you in ways you’ve never been pushed before. Go on an epic ride! That’s the best reason to join a startup.

Some additional reading on this topic as I’m a firm believer that there is nothing new under the sun:

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By Matt Crane
Matt Crane Founder