I'm considering taking a job as a 'Founding AE' at a startup. The founder wants $1M in ARR in year one, and doesn't want to include a ramp period in my agreement. He has 9 clients at this time; I calculate that we'd have to sell one deal per month to hit the ARR number. What are your thoughts?
Thanks!
No. Hard No.
Be careful as a founding AE. There's a strong chance there's not product / market / fit. It took my startup almost two years to get to $1 million. You will need a good base and incentives for booking meetings and pipeline. Has your founder built a company before? Is the company already running over 3million in ARR with over 10 clients? You have to protect yourself because you might be out of role in a year or less. This is a hard role.
Thanks! I think the product/market fit is excellent, but the ARR is only about $1M at this point, and only 9 clients. Hence my concern.
out of curiosity what does your comp look like as Founding AE?
This is a tricky situation. I'd ask a few specific questions: -Who are the 9 customers? -Are they *real* customers or did they have a pre-existing relationship. with the CEO? -Do the customers fall into a clear ICP segment that you can replicate? -How many more prospects are there out there that match the profile of the current ICP? -How many of the current customers have renewed? (probably none if it's the first year) -How many deals would it take to hit $1M ARR? -Will the CEO keep selling after you start selling? -Has the CEO established a repeatable sales process? (probably not) In addition to those, I'd look very carefully at your comp package. If you're not getting ramp, you should have a healthy base pay since variable is far from certain. And obviously you should have a reasonable equity grant (likely in the form of ISOs) as an early employee taking on a lot of risk. Personally, I love early-stage and I've been in your shoes (with mixed results) - but ask questions and think critically about the answers. Good luck!