It has been well documented in the media how exciting and unique employment at a startup can be. The laid back atmosphere, the unorthodox company perks like ping pong tables and company bikes, employee services such as free dry cleaning and childcare, and most importantly, the potential for the big payoff and being on the ground floor of the next global internet phenomenon all feed into the general notion that working for an IT startup may not only be the best career move ever, but also possibly one of the best ever life experiences.

But there are disadvantages and risks to working at a startup. A recent study conducted by Harvard found that 75% of venture capital backed startups ultimately failed.  While it may be a rewarding experience and job, it is not all fun and games more often than not, working for a startup has the potential for a lot of sacrifice with very little payoff.  

For starters, to use an age old expression “there is no such thing as a free lunch.” The company perks such as free food and employee services are there for a reason. Companies provide these “perks” because they want to keep their employees at their desks rather than having to leave work for lunch or errands. More time at work and less external distractions, leads to more productivity as the thinking goes.

Working more is a common theme at startups. You will not be working a 40-hour week. According to a survey from startup employees work 50-80 hours per week in the office, depending on workflow, plus additional time at home.  Employees with a busy life often find the adjustment to startup work culture difficult.

The long hours are due in part to the need to develop and grow the company as well as the “do what is needed” mentality when it comes to your job. In a more established company employees have very defined job requirements. Developers develop. Administrative assistants administer. But in a startup environment the line between jobs and duties become a bit of a blur. The environment is smaller and employees are expected to pitch in anywhere and everywhere. The internet is full of message boards for startup IT employees lamenting about having to clean the staff kitchen or mail letters for their bosses.

And all of these extra hours and job duties do not necessarily lead to extra pay. Startups are usually dependent on external funding until they begin to generate revenue on a large scale. In order to attract and retain quality IT talent, the management of startups often give employees stock in the company. If the company goes public or is bought out like Instagram was by Facebook, then the employees are in for a huge payday. But if the company fails or never hits the big time, then the stock options and the work time they represent, are essentially worthless.

Even worse, sometimes as a startup grows, the owners give out more stock to potential investors or additional employees, or themselves, thus diluting the value of the original stock given to employees.

None of these arguments are meant to dissuade people from working in startups. Some startups will become the next Google or Twitter. And the experience of working in one, no matter how successful, will leave a lasting impact on someone’s professional development. But in this day and age where startups have an aura around them, it is important to remember that there can be a downside as well.