my startup is asking me to invest and ive seen them grow within the past two years. they make it seem like theyre trying to equip more funds so they can pay us bigger salaries but obviously only top dogs are keeping the money. Is it generally smart to invest in a startup or to just move on to another one?
If they have good leadership and transparency, funding to keep the company alive for at least two years, direction, profitable.
If all of those things were true, the company wouldn't need to ask it's employees to bootstrap the company.
That’s true. I would bail from any company asking my for money to work for them.
Run
That one’s easy. Here’s how to tell if a startup’s worth sticking around for: are you the founder or a cofounder?
Nailed it! I speak from experience.
Major red flag
It is a major red flag, just because who is initiating. I’ve seen more interest in this model (https://exicate.substack.com/p/how-to-secure-allocation) as a way to reinvest into a startup. That is proving that there are other VCs that are ready to fund, though.
No do not!
I haven't seen a startup asking it's own employees to invest, other than ESOPs. Red flag in my eyes. Why would they ask employees for funds unless the big investors won't give them any?
Yeah that’s what scared me
Btw the statement you made is counter-intuitive. They want to give you a better salary, so they're taking money from you in the name of "investment" and then giving it back to you in the form of "salary"