[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 [Music] you