A new type of dealmaking is unnerving startup employees. Here are the questions to ask to make sure you don't get left out.

A transformative shift is taking place in the startup ecosystem, particularly in Silicon Valley, prompting employees to reassess their trust in founders. Rather than traditional acquisitions, major tech companies are increasingly opting for licensing agreements and talent deals, which can create a divide among employees based on their skill sets. Those equipped with in-demand AI expertise often find themselves in advantageous positions, while others face ambiguity about their future. A recent example involves Windsurf, an AI coding firm that was on the brink of a $3 billion acquisition by OpenAI. Instead of a complete buyout, the company was divided, with Google acquiring its CEO and key talent, while the remaining workforce transitioned to another startup, Cognition. This trend of unconventional transactions is anticipated to persist, as the rapid pace of AI advancements makes lengthy regulatory approvals less appealing to companies. In light of these evolving dynamics, it is essential for startup employees to conduct thorough research, advises Steve Brotman, managing partner at Alpha Partners. He emphasizes the importance of understanding ownership structures to avoid working excessively only to discover unfavorable conditions regarding stock options or exit strategies. "Companies that prioritize transparency and governance are typically more reliable choices for both career growth and equity," Brotman explains. Candidates should engage in candid discussions about crucial factors such as financial health, investor quality, and growth strategies. Trust in the founder is paramount, according to Deedy Das, an investor at Menlo Ventures. He points out that founders wield significant control over compensation structures and equity distribution, making it vital for employees to have confidence in their leadership. Hari Raghavan, cofounder and CEO of Autograph, advises potential hires to perform their due diligence on founders, ensuring they are trustworthy and committed to employee welfare. He suggests that founders formalize their commitment to fair treatment regarding stock options and exit scenarios. Jake Saper, a general partner at Emergence Capital, encourages prospective employees to thoroughly question founders about their vision for the company’s future, including their stance on independence versus acquisition. Understanding these perspectives can provide valuable insight into the potential trajectory of the startup. Additionally, scrutinizing contractual details has gained importance. Saper recommends ensuring that offer letters and stock agreements clearly outline vesting conditions and retention bonuses, especially in scenarios where only a portion of the team remains. Looking ahead, as major tech firms continue to seek strategic talent acquisitions, employees must evaluate the sustainability of their startups. Startups with unique data assets or stable revenue streams are more likely to maintain independence, while those reliant on transient talent could face significant challenges.