[Music]
yeah we're here to talk about startup
stages try to be as informative as
possible obviously you know given my
position here i would love for you to
consider working at a yc startup it
sounds like some of you already at
startups
but i'm going to overview this the way
that we talk about it which actually
aligns really well with what you're
talking about
and then if you know all this stuff
hopefully you'll stick around and
there's some things to learn if you
don't know all this stuff hopefully
you'll learn a little bit so see it as
we talk about it is typically
pre-product right they don't have a
product it's like your your typical or
your your story of two people in a
garage just trying to build a thing and
build a product get customers obviously
it's pre-revenue
we also talk about seed as you know one
million one million to five million
raised
maybe you'd want to find something even
earlier than that and yc has resources
to do that basically it's paige and i um
but when companies raise money one five
million dollars uh that's when we call
them a seed round and they're ready to
hire uh we'll talk about what it means
to do a safe and an unpriced round and
angel investors again it's two to ten
people uh really small work with
founders and the roles that they're
typically hiring for are engineers maybe
ops people depending on the type of
company and they're looking for people
who are more jack-of-all-trades who are
flexible again we're gonna go in each of
these in detail
so i just want to go an overview so you
get a sense of where we're going with
this
series a
not it is correlated and not always
you know definitely correlated with
having product market fit if you don't
know a product market fitted we're going
to give you a very specific and recent
definition of it um so product market
fit maybe maybe you haven't hit it um
but it has raised as 5 or 20 million it
is a price ground that's important for
your stock and your equity um
vcs venture capitalists are involved 10
to 50 people you know then you start
bringing in mid-level managers you're
not working with the founders as much
and that's just a slight distinction of
how the company is growing and maybe
you're going to be the mid-level manager
if you were there to seed you know a lot
of people want to be there earlier so
they can have more of a leadership
position
also at series a you might have go to
market roles open maybe recruiting roles
open and maybe some specialization and
we'll go into each of those more detail
next is growth so say you have product
markets fit and this thing is firing
we're going to talk about what product
market looks like um but you're at this
point of market capture you're trying to
get more users you're trying to grow um
you're going to bring in more
more gunpowder if you will and that's
like 50 100 million
bcd around the vcs are definitely
involved
maybe maybe strategic investors if
you're in a specific industry and you
might need that
50 to 500 people scaling organizations
codifying departments meaning that
before it was a little uh loosey-goosey
and now you're trying to scale something
to be an organization that's durable and
then the roles are ops customer support
specialization
and then the last stage we talk about is
scale like it's really really really
just market expansion maybe you're going
international maybe you're trying to
find partnerships for like more user
acquisitions i have some examples to
give around twitter and lyft
maybe you're raising literally a half a
billion dollars a lot of institutional
money um 500 plus people uh prepping for
an ipo building out the executive team
redundancy the types of roles that are
at those companies changes and so that's
why it's important to think this is you
know going to be a public company and
what does that look like if you guys
work there
hiring for everything and lots of
specialization so that's where we're
going that's the overview of this thing
and i almost like to give the overview
because if people like i know all this
crap i'm gonna go have my beer that's
fine too
all right so let's go into the seed and
if you have questions definitely shoot
it in the chat and i'll see if i can
circle back before the end
we talk about seat companies a lot at yc
because we are literally bringing on 200
to 250 companies giving them half a
million dollars which is like maybe a
quarter of their seed money and we tell
them to do three things we tell them to
do number one you have to make something
people want and that is hard right how
do you know what people want how do you
know what market what industry but they
have to build something people want
the other thing they have to do in order
to make something people want and mark
and i have experiences so you got to
talk to your users if you've never
talked to users before how do you know
you're building something people want
you're just like theoretically building
something from some theoretical market
and that's where founders who don't talk
to users and try to make something
people want run out of money and die as
a company um and do things that don't
scale you might have heard this have you
guys all heard this raise your hand
maybe you've seen this
okay
no okay there's some people who haven't
so these are like the principles of yc
and if you're gonna start a startup
you're gonna hear this over and over and
over and over again like make something
people want talk to users and do things
that don't scale let's make this more
concrete by bringing in a fairly famous
yc company called airbnb you know before
it was airbnb uh it used to be called
airbedandbreakfast.com
kind of a mouthful not that like airbnb
was taken as a domain
and while you all know it as this
amazing app with hosts and platings and
ways to like book
book a amazing place to spend the night
when it first started this is the
website the website was actually more of
a promotion for this idsa design
conference
trying to get the attention of people
who were flying in as designers and
needed people places to stay right it
wasn't the marketplace in the full sense
or at least didn't come out that way and
they were doing something that was very
specific not scalable but they knew that
there was a pain point around the
designers who were coming in and
couldn't find places to stay
uh you know and the airbnb founders tell
the story certainly better than i do but
this is the mvp where it's a google map
a bunch of people who they hand reached
out to to say can we give you uh a a an
air bed or do you have an air bed and
you're going to host someone and you
could you know the early elements of a
marketplace but you can imagine if you
are starting at an early stage company
like airbnb you are iterating you are
doing things that are not scalable you
are like just slapping stuff together
and hoping that there's something here
and maybe even then you'd be like i
don't even know if sleeping on air beds
is going to be a thing right because it
really comes down to this you know these
this is one of the longest tenured uh
airbnbs of sleeping on someone's couch
that has been on the platform maybe even
the first like year or so
and brian tells this amazing story of he
used to do things that don't scale and
talk to users by staying at these
people's houses seeing what the
experience was and iterating from there
and trying to figure out like how can we
make it more personable more attractive
what touches do they have how can we
improve the photography right that's
what an early seed stage company looks
like and it is it is not scalable it is
talking to users
and is trying to build something people
want on both sides of the marketplace
why do things that don't scale um that's
a great question because a lot of times
your intuition is to immediately do
something that scales and not talk to
users but if you don't have product
market fit if you don't have something
people want
you end up wasting all your time doing
things that are
scaling infrastructure
scaling you know
your system for micro services if you
look at that airbnb website it's a
really really simple thing it's probably
just html you know each you know html2o
maybe jquery if that even existed back
then
um
in the minimum viable product the mvp
um if you do things that if you try to
go and scale too early you might think
okay well i'm going to build this you
know microservices architecture i'm
going to like keep the users started
away from the reservations started away
from like payments and all this other
stuff not a monolith
and that's
from a technical perspective that causes
two two problems and i'm sorry i'm
getting too techy number one you're
investing in infrastructure that is
unimportant because there's no skill
there might not even be users you might
need to iterate number two by building
out that infrastructure for this future
scale that might actually happen
you're actually adding more complexity
to the infrastructure which means you
move slower as a product and as a piece
of software right
yep
next question is
is it able resource efficiency because
you'll eventually get scaling rather
than defensibility or non-obvious
scalable ideas i'm going to think about
what that means later
so that's one reason why you don't want
to scale too early and you've seen
companies that do this and then end up
in a quagmire of infrastructure but have
never actually gotten customers or
product market fit
team 2-10 people it is really focused on
product development you know getting
something out there iterating uh
typically the founders are pms and even
you know paige and i talk to a lot of
our founders they'll come to us and like
i wanna hire a pm right out of the gate
and michael cybel has said this i've
seen this you do not want to be hiring
as a founder a pm you are responsible
for talking to the user you're a
responsible business do not outsource
this and so if you have a product
manager on the call and you're looking
for pm roles i would be wary of
companies that are super early looking
for pms right um there is a place where
that might make sense maybe it's a
series and we'll talk a little bit about
that um but you know that's one one
cautionary tale of like if you're if
you're a pm and you're looking for roles
and there's like a two person team
looking for pm
yeah i'd be worried again open roles
product development i'm talking more
about engineering uh things that are
really just building the product
and operations has a question mark
because early stage companies like
doordash instacart that are operational
in nature sometimes actually hire an
operations person because they need to
be packing boxes they need to be
shipping things they need to be driving
around um alongside the founders doing
it you know even when i was at lyft uh
you know five or six years in the
founders were still driving still taking
rise talking to customers so there's no
excuse for the founders not to do these
things to really understand the
customers but they might hire an
operations person here or there so if
you're an operations person trying to
get in the game an early stage startup
finding one where that resonance is
there
very important the other thing that i
don't have on here that i should mention
is that there are sometimes very
specialized roles that these teams
particularly in engineering if it's ml
or
ml or data science or something like
that if the company is very specific in
that niche of ml or data science right
and so uh while most roles at startups
or a lot of roles are like full stack do
a little bit everything jack of all
trades you'll find some resonance around
companies if they're like specializing
in ml or hardware or specific type of
hardware that they need that
specialization
uh if you need to have pm experience to
be a good founder pm
it turns out that you don't always need
to but you have to
want to do it and be able to pick it up
we have a lot of founders who are just
really really technical and they have an
idea that they might not have been a pm
before and so actually going through yc
we teach them the things that we talked
about make something people want talk to
users
and they learn those things
it turns out that we turn away founders
who don't want to do those things who
don't want to talk to users or make
something people watch and just want to
build whatever's in their head right
because
part of being a good founder is being
adaptable being able to learn and
willing to um to iterate because
startups are never a linear path that's
a good question
compensation at seed stage startups
we're finding that base salary can come
to 80 to 90 percent of thing
and there's a reason for that because
despite what's happening in the market
there are
there are so many startups there's
actually been an influx of capital into
into all stages of startups and
um it's a competitive place so if you're
going to try to lowball anybody on the
market uh particularly engineers at seed
stage companies there's going to be
someone who's willing to pay more you
know we actually tell our founders that
if you are
if you are losing out on founder on on
people who are going through your
interview process repeatedly you're
probably trying to lowball people and i
was talking to someone two days ago and
that's what's happening i'm just like
you're trying to hire someone off of
amazon and try to hire some bloomberg
and you keep losing what are you
offering yeah that's way too low right
and so i say this also to you that you
should expect to get paid 80 90 maybe
that's not
suitable for you you know and that's why
we're going to talk about the different
stages um but base salaries around there
and then maybe the benefits are in place
which is not to say you won't get health
care more than maybe they'll just give
you more money to say hey take care of
health care until we have that hr person
in place or until we figure it out
we yc tell our founders to give 10 to
the first 10 hires that doesn't mean
that they all get one percent it really
depends on where you're coming from
depends on what the criticality of the
role is um engineers because they are so
valuable if you will you know they'll
get two two and a half if you're a
founding engineer maybe like five
percent in a rare case where it's almost
like you're you're a co-founder um
at this point you should expect stock
options uh if people don't know about
stock options it's basically a
percentage of the company the tricky
thing here just to know is that when you
get stock options it's the option to buy
into the value of the company you can
buy it now or you can buy it later the
tricky thing is number one it's kind of
unnatural for anyone who's never worked
at a startup to be like in order for me
to work here i have to pay you
right because you're actually investing
with your own money into the company
because it's a stock option you don't
need to pay it
and you can buy it later
the benefit of buying it earlier means
that you are
buying it at the value that it's
currently at
and
um
you're buying the values currently at um
you're not making a profit right when
you buy it and if you do the thing in
83b election then your tax basis for
that remains
you know you're not getting taxed on it
um you're getting taxed on it as
long-term capital gains you're buying
this asset you're waiting two years and
then four years five years after
a longer period and then when you're
able to sell it you're selling it with a
long-term capital gain which is a lower
tax rate than if you don't buy it
and then say somewhere down the line you
know five ten years from now
you then exercise the stock you don't
have to pay anything out of pocket
because hopefully you bought it for 25
cents it's worth 25
it'll cover itself but you're now paying
a long-term capital short-term capital
gain which is like you know 40 tax rate
i'm not a tax specialist talk to your
tax expert but just keep that in mind
that when you're dealing with stock
options number one you're paying the
company because you're investing in the
company and number two paying for it
later means that you are going to be
paying the long-term capital gains rate
and there's also this other risk of the
thing called amt um alternative minimum
tax that you should look into and um we
can talk about later if it's helpful but
talk to your tax expert as necessary
um
this level of compensation seems great
but i have seen yc companies offering
ridiculous lower salaries and equity
than what you're suggesting i'm happy to
chat with you specifically to see what
you're seeing you don't have the name
companies um but i'm curious because i'm
trying to tell them this and if they're
trying to offer you something and you're
not taking it that means other people
aren't too and that's not in your best
interest and it's not in their
investment system we need to be telling
them that
usual investing period is four years uh
so you have a chance of stock and then
you get one quarter of it in one year
and then typically it's one month
thereafter you'll hear other variations
of this in which it's like i think
amazon and snap do 10 20 30 40
percentage over four years uh so you
know but typical is is uh investing over
four years
i want to start by why not join although
most of you seem to be pretty wired to
like joining early stage terms so you
wouldn't be here number one you need
financial security right and so if it is
um
if you need to get paid 100 or you know
all cash right now and you know netflix
is known for not giving any equity and
paying like 450 to like 600 000 in cash
and if that's what you're coming from
maybe the startup is not going to do it
because you're going to be pulling back
like 180 and that's that's a pretty big
delta totally makes sense you need
structure again startups are sometimes
wild wild west things are iterating
different things are changing if you
need structure that i'm working on this
for the next three months with clarity
uh
startups are typical early stage seed
startups are probably not where you want
to be and if you hate uncertainty right
um everyone does not like
uh
ambiguity or or uncertainty uh and it's
especially so it's startups um you know
are you gonna be able to raise the next
round are you gonna get customers it can
be a roller coaster so if you want that
certainty then you know early stage c
stage startups maybe using series a
might not be for you
why you might want to join a startup um
and there's a great talk by justin khan
who talks about these two things why not
and why
number one is impact if you're at a
larger company maybe you're not
having as much impact in a way that is
feasible or tangible to you
ownership and trust maybe you like a
small piece of something that's really
large
versus an early stage startup seed or
series a you have a lot of ownership you
have a lot of trust learning
opportunities um you're just throwing
the kitchen sink and you got to figure
out how to do it you know if you don't
know how to use a new framework maybe
you got to figure it out new library you
got to figure it out
and then ideally you're working with
knowledgeable founders you know we're
seeing more and more founders who've
worked at yc companies um have learned
maybe through gusto or through instacart
and then coming back and starting their
own companies because they want to do it
so we have some knowledgeable founders
from there facebook google um coming in
and you know starting the next round of
companies
um i go into more detail and i can share
this offline but like you know this
resonates from the conversations that we
have with employees and people who are
looking at startups where they get to
build the foundations of the company not
just the software but also like how
should this organization look how should
we hire people how should we interview
uh people want an outsized impact and
they want to be in a place where they
didn't come into work it felt like a bad
thing that's how i felt when i was early
at salesforce like if i'm not here the
api is not going to get built these
features aren't going to get billed
whether or not that's true i don't know
probably not but that's the type of
person it takes to work in an early
stage company
ownership trust you know feeling like
you're part of the decision making
process founders actually care about
people's product opinions because they
want to be able to scale the ability to
build product by making by letting and
empowering employees early stage
employees to make decisions uh and to be
treated like a peer right to be treated
like someone that that you want to work
with not just like um being told like um
to fix a widget every time
learning opportunities
and you know knowledgeable founders i
mentioned this a bit like co-founders
you should be asking co-founders like
what their experience is what's
what's um their their magic magic
abilities if you want to find seed stage
companies
you can find them yourself on our
platform so
here is a new filter that we added with
company stage that defines these four
things series a growth scale seed you'll
also note that we now have equity ranges
we're encouraging our our founders to
post equity ranges on the platform um
because if it doesn't fit you it's not
what you're looking for you know we
don't want to waste your time
and then here's what the listing of
companies looks like with jobs and so
forth and if any of you have questions
or feedback let me know
these are questions to ask at seed stage
companies and i'd argue you should be
thinking of these questions throughout
your job search at any stage company it
just becomes more relevant when you're
talking to seed stage companies because
you're typically talking to the founders
right and you're going to get the honest
answers and you're also going to use
these questions to evaluate the founders
and whether or not you want to work
there the first one is what is your
runway and burn rate right a lot of
these um a lot of these companies that
are that are
that are having layoffs and
unfortunately hitting the skids have not
been looking at their runway and burn
rate or we're looking at their runway
and burn right in a the rosiest
um glasses possible right but obviously
the market is pulled back a bit maybe um
uh consumer spending or even enterprise
spending has gone down the economy you
can't get lending all those kinds of
things so
fundamentally this question of what is
your runway and burn rate is asking the
founders how do they think about the
business what are the variables to the
business uh those variables are how much
money you've raised um how how much
you're doing literally in revenue right
um when that revenue runs out uh what is
your plan is your plan to grow revenue
how much by what point what are your
goals um as well as when are you going
to raise a series a
you or series b or whatever the next
round of funding is right you're just
you're asking the question maybe you
don't need to know everything about it
but what you're really also asking is
like how does the founder think about
this as a solid business because
they're the person who's going to be
thinking about this day and night and
you want to be able to trust them and
understand that they know their business
their product their customers and so
forth
right so you should be able to ask that
and we tell our founders to be very
transparent with what this is because
anything less than transparency is both
just being a jerk and also uh being
disingenuous right
you want to know that they know who
their customers are who they're selling
into who's paying for this thing and
really have a good sense of where there
might be product market fit and the
answer is not always a we have product
market fit um based on your appetite for
risk it might be like we're really early
and we're trying to figure that out we
have these two prototypes we have these
two demos and that should
factor into the risk equation of how
much compensation how much equity that
you're going to be getting but these
customers
you need to know your customers or at
least your prospective customers are and
that's a question that you should
absolutely be asking
um what insights do you have that others
don't look there's a million different
software's out there and many competing
in the same market and you ideally want
founders who have an insight or have
knowledge about the industry or the
space or have learned something unique
or novel in starting their startup that
gives them an advantage and in fact we
ask this of them on their yc application
we interview for this we want to know
how much they're thinking about it so
you should be asking these questions and
if they don't have a great answer or
they're giving you hand-wavy answers
that's not a good situation again either
you should be able to ask at any stage
how do you evaluate your stock options
and we tell our founders to go into
gross detail about how much it's worth
even if it's not worth very much at all
how much you could grow but also that
this thing could go to zero right uh it
just is what it is and again you want to
be as full transparent full transparency
from the founders and if they're not
giving that to you you should have cause
for concern
and lastly what can i learn by working
here and working with you you know
ideally we all want to be learning stuff
on the job i don't know any job in which
you like want to stop learning
so you probably want to be working with
people who have something to share or to
learn from and i look at this
from all types of companies small or
large if you look at the founders and
their background whether it's in sales
like salesforce whether it's in like
design
um whether it's design like twitter or
whether or not it's um
it's operational like the founders of
lyft right you're gonna learn a lot
about that industry and you're gonna
learn a lot about the founders in that
space because that's where they're
specialists and that's where they're
going to go deep and just by looking at
the founders and understanding okay well
that's how the business probably is run
and do i jive with that and is there
stuff here that i'm going to learn by
working here with you
questions there
there's a question about how many years
of experience are yc and non-yc starts
looking for within ds and ml rolls um
for early early early stage if you want
to join some like we've had some
like turing was one postera was one
they're looking for ds and ml people who
are probably like five to ten years of
experience uh typically early hires are
pretty experienced there are anomalies
when they hire people who are like fresh
out of college um so
there's a range but typically if you're
looking for ds and a really really early
stage companies they want some
experience who's built models so maybe
build models and infrastructure almost
like a full stack data science person
all right so that's a
so that's a quick wrap on seed stage and
we'll have q a afterwards now let's
transition a bit to series a in series a
as we mentioned earlier is like product
market fit
we always talk about product market fit
as mark andreessen define product market
fit which is the customers are buying
the product just as fast as you can make
it usage is growing just as fast as you
can add more servers like this is like
where scale becomes like throwing more
service and scaling this thing money
from customers is piling up in your
company's checking account that's very
important you're making a business
you're not just like giving a thing away
for free and running red and going out
of business and you're hiring sales and
customer support staff as fast as you
can
not all series a companies have this but
if you define product market fit here
it's somewhere in the space where either
you have it or you're right before
having it and that's why the investors
might be starting to invest
michael seibel who is a partner here at
uh at yc and one of the founders at
twitch has this kind of corollary which
is like people i.e founders act like
product market fit the term is flexibly
defined but it's not
you know they use it as if it's like
saying green or blue or yellow and just
calling them all orange you know calling
oh i've talked to a couple people and
there's product market fit or we have
two customers in this product market
fitter we have a backlog of loi and
there's product market fit those things
are not product market fit there's no
one selling there's nothing burning um
and so be sure that when you're asking
those questions of who are your
customers what's your run right what's
your burn rate
that they're answering very specific
clear crystal crystal clearly what they
define product market fit and whether or
not you jive with it right um product
market fit happens after you build
something that people want it's it's
product market fit happens after you
build something people don't want it's
when users are using your product in an
explosive and destructive way um he uses
this example at twitch in which like it
feels like you're just trying to get
people to use you're just trying to get
people uh to stream and like that was he
said was assistive physically and has
just rolling a ball uphill and the
amount of things that you had to do as a
streamer early on with like ods and
having a video camera and getting any of
this stuff to work because it's even
before
laptops had video cameras was just
impossible but when it finally clicked
people were streaming so much that their
servers were on fire that they were you
know paying more at aws costs than they
actually had in the bank like it was
arguably you know are they making money
maybe not at that point but it was very
clear that there was that they had built
something that people want that that
this thing was now trying to stop
the proverbial uh boulder
from rolling downhill and crushing
everything in his way and so that's like
the destructive force of actually
hitting product market fit
so
we define the series a it's like product
market fit you're really close to that
you've raised five to 20 million dollars
it's still an investment in building
product and driving adoption and so you
want to get it in more people's hands
maybe there are a few customers that you
have that shows that like look there's a
hundred million dollar oh sorry a
hundred thousand dollar annual contract
you're doing like you know three million
arr and it could grow is that product
market fit you're pretty close and the
question for you is like trying to
figure out whether or not that's true
and we'll give some tips on how to do
that um venture capital is usually
invested or involved maybe you heard
sequoia and andreessen i wouldn't use
those names
i wouldn't use those names just alone to
say this company has product market fit
or that i should join because of that uh
and sometimes founders will put you in
touch with with people at increasing
insecurities to sell you and that's good
data and good information um but you
have to use your own judgment your own
signals your own criteria of what you
want to join and what matters to you
um the other thing about the fundraising
at a five to twenty million series a is
that it's a price round so if maybe
andreas or sequoia has put in 10 million
dollars had a 50 million dollar
valuation that means that they now own
20 of the company right and so there's
actually a fixed price per share and so
if you're given an offer with a certain
number of
um shares then you can actually learn
what that's worth even if it's funny
money early on or if you were to early
stage c company and then they raised a
series a you can actually price what
that's worth and we'll show an example
of that that might be like okay now you
see why people join series a c stage
companies
so i'm repeating myself because my nose
keeps itching this is tmi and we
eventually end up editing this thing so
i like repeat myself without my hand
being in my face
tmi sorry okay so that's the price
ground
what does the team look like at that
stage 10 to 50 people really focused on
building product just like they were at
the seed stage but you're really trying
to find product market fit or grow what
you have as part of market fit to you
know to grow the the user base and grow
sales that's where you start hiring go
to market experts recruiting maybe
specialists maybe customer support too
but definitely go to market you know
early stage salesforce was just like
what are the two things that matter
building a product and selling it and i
find that to be for most most companies
particularly in b2b so your early hires
are going to be all engineers to build a
thing and uh sales people sales people
by the way these early stage companies
don't look like you're order taking kind
of like hey who wants it line up and
then i'll like negotiate a good offer
early stage
startup sales people
have a really good insight of product
want to talk to customers aren't just
disqualifying aren't just being like
okay you don't need these qualifications
you're not a prospect get rid of it
they're really sitting there with
customers understanding the pain points
and trying to figure out where the gap
is and bringing that feedback
back into product one of salesforce's
early sales people um the guy named drew
was delightful to work at and i had
always like been wary of sales people
but he would come back with really great
product feedback which would help him
because he's you know in my ear about
what we should be living and then we
prioritize it but also helps us
understand what is actually happening
out there in the market
all right
compensation again it's about 80 to 90
percent of base salary you're going to
have health and dental and it's gonna be
closing in on market rates by series you
know what we call growth it is very it's
like at salary for uh for for the market
equity you're still doing stock options
if you do the math uh i don't know if
this math is 100 correct but like 25.25
so a quarter percent of 50 million
dollars might be 250k i feel like that's
off um
um but you know that's where again you
get to the point where it's a priced uh
per share and you could back into how
much that you have this company again it
is funny money early stage with a four
year investing schedule similar to
before
we have a number of series a companies
in our portfolio it's crazy this market
right now because while on the one hand
there are layoffs and there's a lot of
companies having um uh stutter steps we
are seeing a lot of series a companies
or a lot of companies in the past couple
of batches raise their series they are
announced at series a and um you can use
the tool like you saw before yeah it's
125k sorry about that it didn't make
sense um i think i was just i was
messing with the numbers earlier uh but
there are a number of series a companies
you can use our tool and if you reach
out to us in series a it's more of where
you need to be shoot us know and then we
can try to help you find them if the
tool doesn't work and the tool sometimes
doesn't work
going a little there's a quick note
about the tool you can also search so
there's the ability to search by stage
you can also search by a number of
people employees at the company if
that's like an easier metric for you
cool
i'm going a bit into growth which we
just talked about as a lump beyond
um
beyond series a
one of the indications of whether or not
there's a company seeing growth and it
doesn't necessarily mean that it's like
100 but like if you're if your spidey
sense is tingling is
the round of funding the size and they
want to get the word out because they
want people to know that this is
seeing growth
it has found product market fit and it
is in some ways more stable than
certainly the prior to
two stages of startup and so here we
have what night that was you know two
years ago raised four million dollars as
a seed round
which is kind of what we talked about
and then
three or four months later
they raised a 20 million dollar series a
i believe from sequoia or andreessen
and then
not that far after i think you know they
the the the sequences was a little
earlier because obviously the
announcement happens later they raised
50 million in a
um i think a series b and this is where
it tips into growth and then by
september it's like 150 million from
from yc
and uh capital g
right and so i'm not saying that this is
always the case and you might not always
know but this is like the trajectory of
like the ones that are growing really
quickly now we work here at yc and you
know the founders we check in with them
and they're just seeing explosive usage
both in terms of users both in terms of
sellers both in terms of buyers and um
you know going into different markets
has been pretty effective so
this is when you this is one of the
indications of growth um one thing i
want to take it
as an anecdote when you're interviewing
with companies and you're asking the
questions that we were asking about
runway revenue burn rate um it is a
great sign especially if it's true
if you are
interviewing at a company and they are
very close to raising the next round if
not you know they have a term sheet and
they're about to sign it
right um
because it's easy to say hey i'm a
series 8 company and we're
going to be looking at doing a series b
right by this time frame it's a very
different thing to say we have
two offers and two term sheets
and we're about to sign one of the two
uh from this firm or this firm and when
you're
interviewing again if you're asking
around funding burn rate runway
um
a lot of times the companies will just
tell you this
because they want you to join because
what it means for you if you join right
before
they sign is that you will be
your stock will be worth more than when
you initially joined like in in three
months
i bring this up because whatnot hired
five people off of the workers startup
platform between
series a and series b and i think maybe
two people between seed and
series a
and they were very transparent about it
because they went through the interview
process they liked these people and
they're like look we want you to join
we're going to pay you x amount in cash
but then also
we're this close to raising around and
if you join this is the upside right um
so that's something to consider and to
ask those questions the other thing i'll
throw out you is that there's obviously
some nuance to asking these questions in
a way that uh it doesn't come off as
that's being the only thing you care
about it should be something that you
care about because you want to be rowan
in the same boat growing this thing
but know that
halfway through if not clearly by the
end uh the company absolutely wants you
whatever the company it is the company
wants to convince you they want to like
you know make sure that you're going to
join and you have a tremendous amount of
leverage and um asking questions you
you're more leeway to ask questions
without coming off uh as presumptuous
and you're evaluating your options at
that point
question is it uncommon to get equity as
an intern to start it is pretty uncommon
yeah
usually comes in a full time offer
all right so those are two quick
anecdotes of just like you want to be at
a company and if you ask the questions
and you find the right one uh you'll
find one that is
um
at the precipice of of raising their
next round
um another tool is that we have our
founders actually post
we have our funders actually post the
news on their y combinator website which
then shows up here so you know if you
look at some of the rounds of funding
and how they look at it the
founders are telling you you know that
there's growth as a trajectory again you
got to ask the right questions um but
the information is there for you to find
on your own
product market fit startups uh have made
something people want they have and
continue to talk to users right that's
how they have a product out there that's
how they have people using it but they
are at this point where they do things
that don't scale doesn't scale
do things that don't scale doesn't scale
anymore
and while there might be like you know
special projects or special teams that
you have to do things that don't scale
for the main business you need that to
scale and for your main business and
your main organization those need to
scale too so at a growth stage company
it's 50 to 500 people they are codifying
the departments unlike early stage
startups where maybe you'll be like an
engineer who also does a little bit of
product and talks and does support now
there's a product organization there's
an engineering organization there's a
support organization and they're trying
to scale the organization to succeed
right they're trying to scale by adding
more people by adding more departments
by adding executives uh and making sure
that the thing will have longevity if
you will and be successful in each of
the go-to-market areas
open roles clearly in support and
success um ops like internal operations
whether at sales ops or people ops or
even engineering ops like tpm technical
program managers who are coordinating
all of the engineering stuff and
certainly in recruiting
i was talking to someone earlier about
like how early is too early for
recruiting certainly at growth companies
yes um again it's an interesting thing
to be asking for a series a company how
much money have they raised what is
their head count plan is it realistic
for them to grow and hire in this
direction and do you want to be the
person who is going to be hiring those
things and is your background relevant
to the things that they want which is
usually like engineering and sales
if you're trying to be recruited for a
seed stage startup as a recruiter
it doesn't make as much sense to me
personally
because you first have to start with the
basic principle of do you have enough
money to hire how many people are going
to hire if i'm successful and i hire
five people then our runway is going to
go from five years to one year does that
make sense
right you got to ask that to yourself
and even if you're not a recruiter
thinking again about how the founders
think about growing the business and
growing the company is useful to know
these guys have got it together or you
guys don't know what they're doing
yellow flag i see some nodding hope
that's helpful
compensation salary at a growth stage
companies at market because they're
trying to attack people attract people
from fan companies you're gonna get full
health and benefits um the equity is the
part where like look again if you're
amazon and you're making you know 100k
uh 400k package over four years 100k
plus you're not gonna have that
liquidity and that's the part where like
you're gonna have to clearly pull back
you're also probably gonna get
restricted stock units which are not
like stock options you cannot pay you do
not have money out of pocket um it is
effectively when the company has
liquidity um
when the company has liquidity you're
going to get paid out uh
your your your equity is going to grow
um and then when it is vestable um you
can exercise it and then take that
compensation and you know it gets taxed
as if it were regular compensation and
there's withholding and lots of things
like that so um similar to just public
stock but rsus are private stock with
hopefully more ceiling and more room to
grow
and his tactus salary whenever it's
liquid
we have examples of why i see companies
like revenue catfanta postdoc paves if
there's plenty of them
there's a website called
sorry there's a website called y
combinator continuity we actually have a
later stage investment firm called the
continuity fund and you can go to their
website you will find the companies that
we have um put our
you know money where our mouth is as a
second or third round in the hopes that
they will grow even more um and those
would be our growth stage investments
like brex or i mean this this is both
growth and you know scale stage
investments like brex coinbase convoy
gusto deal 5 tran there's a there's a
lot of them out there so if that's more
of what's in your wheelhouse that's a
good resource and again you can use
worker to start up
we're going to talk really briefly about
scaling how to be cognizant of time
oh my gosh
hopefully some people can run over page
and i were like how much time is this
gonna take and i'm like i'm talking too
much scale uh you're raising half a
billion dollars you're looking for
market domination international
expansion it turns out that whatnot is
actually now looking at international
expansion so okay great institutional
investors um
not maybe vcs are already in there but
the the upside for dc is not really
there as much as um
you know a hedge fund
evaluation you should expect the equity
to be at the public market like if you
get a offer with rsus of a scale stage
company to be like well if this company
would public at this valuation would it
be worth it
um and different companies have
different ways of calculating that uh
here's what they shared with me at lyft
before i joined but they're like look at
this thing it's growing it's from seed
series a series b and you're joining
where the stock is at 22. i think
they're trying to tell a story that this
thing will grow and maybe it would i
just looked at it as okay well this
thing went public at 22 and that's what
the public market values it at i'd be
happy
right and there was a point where it was
like at 50 and i was very happy but then
it was down at 20 again you're like
that's reasonable so i think if you go
in with right expectations of what this
is um and how much more it could grow
depending on where you're joining that's
a great way to look at the
scale stage companies but i think the
other thing to look at is um you know if
i were early at lyft with a seed or a
series a where the value of the price
per share were 25 cents and it we're
going up to
25 and 100 x i probably would be pretty
happy right um because i probably would
have gotten a pretty decent size of the
company and um despite whatever else
happens you know you probably also can
get refreshers you get more stock along
the way that's worth a healthy chunk of
change and that's why a lot of people
pick early stage companies it's not a
guarantee a lot of them just go under
most of them go under um but if you can
get paid but it feels reasonable from a
base amount and get a lot of equity in a
company or even just a little bit of
equity relative the whole thing and it
grows uh with each successive round your
stock is worth something
all right
scale is like 500 plus people thousands
hiring for all roles they're thinking
about international they're thinking
about role redundancy i remember at
salesforce by the time i left there was
like a guy
who was the backup to my backup on the
api
right or maybe maybe i was the backup to
the guy who was like the expert in the
api even though i built it because i was
just like i don't know what the hell i'm
doing um and that's important because
you know for better or worse if the main
person gets hit by a car and is out for
a bit then they need someone who can
like manage it and keep it growing um
internationalization has its own host of
problems of like you know
internationalization teams language uh
going to market all over the place and
you'll also find just as you will with
you know fang companies deep
specialization um the one i always use
is that i was at lyft later stage in the
pm of the ipo and there was one person
that we had hired who was an expert at
doing db replication to like seven
nines because that's what our
accountants needed to make sure that we
were ipo ready
very specific this guy was created what
he did um and that's the level of
specificity that you can find at later
stage companies and obviously public
companies so they might be preparing for
an ipo not all of them um but you know
instacart probably is looking to ipo
sometime you know it's been a while so
that's another one
that's not a statement that they're
going public i'm just hypothesizing
they're a 10 year old company you know
they've brought on another ceo and
another cfo those are the things that
you look at you're like okay you know
you're you're prepping for
you should be
last thing startups versus large
companies why would you want to work at
one versus the other
biggest differences again generalists
and specialists early stage companies
you want to be a jack of all trades you
want to have hands and customer support
understanding what the product looks
like talking to customers and things
like that you know when i was building
the api at salesforce i was talking to
developers trying to figure out whether
or not people wanted this api and like
what made sense um versus later stage
company becomes specialist you really
like mongodb charting
smaller companies you have access to
customers in the business right it's
like everything is open founders are
having all hands over beer with like 20
30 people
larger companies
boston dynamics enough said
ownership and impact you know early
stage companies you have more ownership
over a smaller thing but you dictate how
it goes and you have more impact in that
relative to
a large company where you might have
just a sliver of something you can have
a pretty large impact relative to that
size company which is not to say that
like look if you're at facebook and
you're building this setting that is
very important for privacy and making
sure it's visible that it's not
incredibly impactful um you know you
have to just weigh the like the the
surface area of people that you're
helping with what you're building as
well um but a lot of people pick smaller
companies because they feel they have
more ownership and impact in a way that
they don't or they might not even have
product direction at larger companies
that's where i start to grade at
companies where i'm like okay it's time
for me to leave if i don't have that
impact
um operator opportunities to try new
things uh lateral movement especially at
early stage startups things just keep
changing you want to try multiple hats
and compensation right like there's a
risk reward involved and if you need
that stability that certainty you join a
later stage company
plenty of examples of those in our
portfolio i believe these are all ones
that are not yet public instacart stripe
whatnot gusto rappy five-term ducks i'm
not putting into a bucket as some kind
of statement but these are just the like
scale companies there's also scale
scale which i forgot which is a an ml
machine learning platform
as a service
so we have those and again if you're
looking for something more in this space
you can let us know
so as a recap those are how we think
about it that's a lot that's packed into
that little drop down of seed series a
growth scale i have no idea how we're
going to educate people on that maybe
we'll record this video and we'll share
it under the tool tip of if you don't
know which startup you want to join or
you have questions watch this video
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you