Warning Signs

How to tell if a company is in financial trouble before you join

Joining a company that's a few months from layoffs or closure is one of the harder things to recover from in a job search. The good news is there are real signals, and most of them are publicly accessible.

For public companies, the SEC filings tell you a lot. The 10-K is the annual report, the 10-Q is quarterly. You don't have to read all of it. The "liquidity and capital resources" section and any going concern disclosures will tell you quickly whether auditors have flagged anything.

For private companies, it's harder but not impossible. Funding history is the first thing to check. Crunchbase and PitchBook show when the company last raised, at what valuation, and from whom. A company that raised a large round two or three years ago and hasn't raised since is living off that runway. Ask in the interview how long the current runway is and what the plan is to extend it.

Revenue signals are available if you look. G2, Glassdoor, LinkedIn, and job postings all give you indirect data. A company aggressively hiring for revenue-generating roles is betting on growth. A company replacing attrition slowly or posting the same roles repeatedly is often struggling to fill them for a reason.

Talk to people who work there. Not through the company's arranged reference process. Find someone on LinkedIn who currently works there or recently left and send a cold message. Most people will talk.

What most people don't know

Layoff rounds at private companies often aren't public. Layoffs.fyi and Blind are worth checking. If you see a company with recent mass departures and the public narrative doesn't explain them, that's worth investigating before you accept an offer.

You can ask directly in the interview. "Can you tell me about the company's current financial position and runway?" is a legitimate question for any role above entry level. A company in a healthy position will usually answer confidently. Evasiveness is its own answer.

Quick reference

Public companies

SEC EDGAR (sec.gov/edgar) for 10-K and 10-Q filings

Private companies

Crunchbase, PitchBook for funding history

Layoff tracking

Layoffs.fyi, Levels.fyi, Blind (employee posts)

Ask directly

"What's the current runway and what's the plan to extend it?"