To add on to Alex's points.

Customer retention

ask for Net Dollar Retention metric. Google around for what "good" looks like (at least 110%, ideally above 150%)

### Revenue growth 

Revenue should triple or double year over year. Source: <https://www.saastr.com/is-it-now-triple-triple-triple-double-double-double-t3d3-for-top-tier-saas-startups-probably/>

Join a startup after they have product-market fit to derisk. That means the product has to be already in a good shape and people are buying (evidence from ARR, annual recurring revenue). The next step is to build out missing features and do scaling work: in software and in sales, marketing.

One heuristics of a growth phase B2B company (pretty sure chance of equity being worth something) is the hiring of a lot of sales and marketing people. In my limited experience, for B2B company, the sales headcount (business development, account manager, solution engineers...) is at least double the engineering headcount. You can see the company's Linkedin profile for this.

Joining a startup before product-market fit means accepting that there can be years of iterating on a product that does not sell well, or the company folding. You would get more equity though.

### Overvaluation

Google for "revenue multiple", it's roughly the x in the formula below:\
revenue \* x = valuation

For example, if revenue is 100mil, and valuation is 10 bil, then revenue multiple is 100.

As of Dec 2022, this is too high, meaning if the startup were to be public right now, the market would value it at a price way below 10bil. And your equity is worth less than the startup claims.

I don't know what's a good multiple for now, many things affect it, but my impression is it should be below 50, 20-30 is better.

I believe selecting a startup to join is not easy at all, but it's easier than commonly thought. Hope the above points help.

email me at john dot snow dot alias at gmail dot com if you want to chat.

Thanks Alex and Rahul for the great forum. I asked and received several answers so far about career growth as an engineer.