Startups: Workers Take a Chance on Benefits

by Mark Carter  on Monday, Sep. 6, 2010 12:00 am  

Ryan Green understands he rolled a 7. His decision to eschew more money and better benefits to join a promising startup after graduating from college five years ago has paid off.

He has risen through the ranks of Fayetteville's Acumen Holdings at an accelerated pace, and this month will be granted minority-ownership shares in the growing e-commerce firm.

Most of the time, however, entrepreneurs and those who play the startup game roll craps.

The career path leading to big corporations is worn for a reason - the stability, benefits and guaranteed paychecks they offer. Still, the pang of regret over not having taken a chance is something many job seekers fear more than not making good money or enjoying good health benefits.

Entrepreneurs talk a lot about "end games" - the successful transition of their venture to capital success or acquisition - but really, for them it's about the quest. The stability and benefits offered by the corporate world are replaced by the high risk but sometimes high reward associated with working for a startup.

Such is the mindset necessary in the startup game, and for those who choose to play, "corporate" concepts like group health and paid time off are luxuries that sometimes remain part of the quest. That is, if they're even considered much at all.

"For me, that was never the primary objective," said Jeff Amerine, a serial Silicon Valley entrepreneur who currently teaches entrepreneurship classes in the Walton Business College at the University of Arkansas, works with the UA's Technology Licensing Office and serves as an adviser for Innovate Arkansas. "Surviving and excelling during the jungle warfare that startups require was the most fun."

Most startups can't afford to offer health plans or vacation time. What they can provide, however, are other benefits like ownership shares and the satisfaction of doing rewarding work. In his 18-year run with multiple ventures, Amerine said stock options were available to employees at all levels.

"These were the main financial incentives short of being a founder with an equity stake from the outset," he said.

 

Tradeoffs

But not every entrepreneur can afford to wait it out for things like stock options. One Little Rock techie had to return to the corporate world earlier this year when the startup he worked for underwent a structural hiccup. The only reason to return to "9-to-5," he acknowledged, was for the health coverage his family needed. He preferred that his name not be used for fear of upsetting his new bosses, because while he appreciates the stability his new gig affords, he misses his startup days - the flexibility, the creativity, the personal satisfaction.

 

 

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