YC Ultimate Job Guide: Startup Stages

[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 are 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.

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 typical 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 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. But when companies raise money, one to five million dollars, that's when we call them a seed round and they're ready to hire. 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—really small, working with founders.

The roles that they're typically hiring for are engineers and maybe ops people, depending on the type of company. They’re looking for people who are more jack-of-all-trades, who are flexible. Again, we're going to go into each of these in detail, so I just want to give 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 what product-market fit is, we're going to give you a very specific and recent definition of it. Product-market fit, maybe you haven't hit it, but it has raised five to twenty million dollars; it is a priced round. That's important for your stock and your equity.

VCs—venture capitalists—are involved, ten to fifty 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. 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 in more detail.

Next is growth. So say you have product-market fit and this thing is firing. We're going to talk about what product-market fit looks like. But you're at this point of market capture—you're trying to get more users; you're trying to grow. You're going to bring in more gunpowder, if you will—and that's like fifty to one hundred million; BCD round, the VCs are definitely involved. Maybe strategic investors, if you're in a specific industry, and you might need that fifty to five hundred people scaling organizations, codifying departments.

Meaning that before it was a little loosey-goosey, and now you're trying to scale something to be an organization that's durable. 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 more user acquisitions. I have some examples to give around Twitter and Lyft.

Maybe you're raising literally half a billion dollars—a lot of institutional money—five hundred plus people prepping for an IPO, building out the executive team redundancy. The types of roles that are at those companies change, 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 are like, "I know all this crap, I'm going to 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 seed companies a lot at YC because we are literally bringing on two hundred to two hundred fifty 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, is 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.

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 going to start a startup, you're going to hear this over and over and over again: 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, 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 book an 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 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 there was a pain point around the designers who were coming in and couldn't find places to stay. 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 say, "Can we give you an airbed? Or do you have an airbed? And you're going to host someone?" 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 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, this is one of the longest tenured Airbnbs of sleeping on someone’s couch that has been on the platform—maybe even the first 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 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? 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 your system for microservices.

If you look at that Airbnb website, it's a really, really simple thing. It's probably just HTML, you know, HTML2O, maybe jQuery, if that even existed back then. In the minimum viable product, the MVP—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 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 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 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—getting something out there, iterating. 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 Seibel 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?

There is a place where that might make sense; maybe it’s a series, and we'll talk a little bit about that. But, you know, that's one cautionary tale of like 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—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, you know, five or six years in, the founders were still driving, still taking rides, 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 is 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 data science or something like that, if the company is very specific in that niche of ML or data science, right?

And so, 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.

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 want, 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 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 eighty to ninety percent of thing. And there's a reason for that because despite what's happening in the market, there are so many startups. There’s actually been an influx of capital into all stages of startups, and it’s a competitive place.

So if you're going to try to lowball anybody on the market, 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’re losing out 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 eighty to ninety, maybe that’s not suitable for you, you know, and that’s why we’re going to talk about the different stages. But base salaries are 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 at YC tell our founders to give ten percent to the first ten 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. Engineers, because they are so valuable, if you will, you know, they'll get two, two and a half percent, if you're a founding engineer, maybe like five percent in a rare case where it’s almost like you’re a co-founder.

At this point, you should expect stock options. 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 you're buying the value that's currently at, 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.

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 twenty-five cents—it's worth twenty-five. It'll cover itself, but you’re now paying a long-term capital short-term capital gain, which is like, you know, forty 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—alternative minimum tax that you should look into and we can talk about later if it’s helpful, but talk to your tax expert as necessary.

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 to name companies, 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, 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 ten, twenty, thirty, forty percentage over four years—so, you know, but typical is investing over four years.

I want to start by why not join, although most of you seem to be pretty wired to join 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 one hundred—or, you know, all cash right now—and, you know, Netflix is known for not giving any equity and paying like four hundred fifty to six hundred thousand 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 one hundred eighty. And 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, “I’m working on this for the next three months with clarity”—startups—typical early-stage seed startups are probably not where you want to be.

And if you hate uncertainty, right? Everyone does not like ambiguity or uncertainty, especially so in startups. You know, are you going to be able to raise the next round? Are you going to get customers? It can be a rollercoaster, so if you want that certainty, then, you know, early-stage C-stage startups, maybe even Series A, might not be for you.

Why you might want to join a startup? 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—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—coming in and, you know, starting the next round of companies. I can 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?

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 built. 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 early-stage employees to make decisions and to be treated like a peer, right? To be treated like someone that you want to work with, not just like, um, being told 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 what their experience is, what their magic abilities are. 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 founders to post equity ranges on the platform 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 companies 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 the rosiest glasses possible, right?

But obviously, the market has pulled back a bit—maybe 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?

Those variables are how much money you’ve raised, how much you’re doing literally in revenue, right? When that revenue runs out, what is your plan? Is your plan to grow revenue, how much, by what point, what are your goals? As well as when are you going to raise a Series A, or Series B, or whatever the next round of funding is, right?

You’re just 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 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." 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.

"What insights do you have that others don’t?" Look, there’s a million different software 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, 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?

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 design like Twitter, or whether or not it’s operational like the founders of Lyft, right? You’re going to learn a lot about that industry and you’re going to 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? 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 roles.

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.

Typically, early hires are pretty experienced; there are anomalies when they hire people who are like fresh out of college. So there’s a range, but typically if you’re looking for DS in really, really early-stage companies, they want someone experienced who's built models—so maybe build models and infrastructure almost like a full-stack data science person.

All right, 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, it’s like product-market fit. We always talk about product-market fit as Marc Andreessen defined 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 server 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.

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 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 fit,” or “We have a backlog of LOIs, and there’s product-market fit.”

Those things are not product-market fit; there's no one selling, there's nothing burning. And so, be sure that when you're asking those questions of who are your customers, what's your run and burn rate, that they're answering very specific, clear—crystal, crystal clear—what they define product-market fit and whether or not you jive with it, right?

Product-market fit happens after you build something that people want; 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.

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 to stream. And like that was, he said, was assistive physically, and 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 this thing was now trying to stop the proverbial boulder from rolling downhill and crushing everything in its way.

And so that’s like the destructive force of actually hitting product-market fit. So we define the Series A as like product-market fit. You’re really close to that; you’ve raised five to twenty 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 trying to figure out whether or not that’s true, and we’ll give some tips on how to do that.

Venture capital is usually invested or involved. Maybe you heard Sequoia and Andreessen; I wouldn’t use those names just alone to say this company has product-market fit or that I should join because of that.

And sometimes founders will put you in touch with people at increasing insecurities to sell you, and that’s good data and good information. 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.

The other thing about the fundraising at a five to twenty million Series A is that it’s a priced round. So if maybe Andreessen or Sequoia has put in ten million dollars at a fifty million dollar valuation, that means that they now own twenty percent 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 shares, then you can actually learn what that’s worth even if it’s funny money early on. Or if you were to an 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 priced round. What does the team look like at that stage? Ten to fifty 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 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 companies, particularly in B2B. So your early hires are going to be all engineers to build a thing and salespeople. Salespeople, by the way, these early-stage companies don’t look like your order-taking kind of like, “Hey, who wants it—line up, and then I’ll like negotiate a good offer.”

Early-stage startup salespeople 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 salespeople, a guy named Drew, was delightful to work with. And I had always like been wary of salespeople, 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 would prioritize it, but also helps us understand what is actually happening out there in the market.

All right, compensation again, it's about eighty to ninety percent of base salary. You’re going to have health and dental, and it’s going to be closing in on market rates. By Series A, you know what we call growth: it is very—it’s like at salary for the market. Equity—you’re still doing stock options.

If you do the math, I don’t know if this math is one hundred percent correct, but like twenty-five point twenty-five, so a quarter percent of fifty million dollars might be two fifty K. I feel like that’s off.

But, you know, that’s where again, you get to the point where it's a priced 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 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 you can use the tool like you saw before.

Yeah, it's one hundred twenty-five K; sorry about that; it didn't make sense. I think I was just—I was messing with the numbers earlier. 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 a note, 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 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 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 two stages of startup.

And so, here we have whatnot—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 twenty million dollar Series A, I believe from Sequoia or Andreessen.

And then not that far after, I think, you know, the the sequences was a little earlier because obviously the announcement happens later—they raised fifty million in a, I think, a Series B—and this is where it tips into growth. And then, by September, it’s like one hundred fifty million from YC and 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, you know, going into different markets has been pretty effective, so this is when you—this is one of the indications of growth.

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?

Because it’s easy to say, “Hey, I’m a Series A company, and we're going to be looking at doing a Series B 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 from this firm or this firm.”

And when you’re interviewing, again, if you’re asking around funding, burn rate, runway, 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—that your stock will be worth more than when you initially joined.

Like, in three months, I bring this up because Whatnot hired five people off of the Worker 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?

So that's something to consider and to ask those questions. The other thing I’ll throw out to you is that there’s obviously some nuance to asking these questions in a way that 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 rowing in the same boat growing this thing, but know that halfway through, if not, clearly by the end, 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 asking questions, you're more leeway to ask questions without coming off 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, you'll find one that is at the precipice of raising their next round.

Another tool is that we have our founders actually post—we have our founders 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, but the information is there for you to find on your own.

Product-market fit startups 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. For your main business and your main organization, those need to scale too.

So at a growth-stage company, it’s fifty to five hundred 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, 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, 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. Again, it’s an interesting thing to be asking for a Series A company how much money have they raised, what is their headcount plan, is it realistic for them to grow and hire in this direction, and do you want to be the person who will 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 you're doing—a yellow flag.

I see some nodding, hope that's helpful.

Compensation—salary at growth-stage companies at market because they're trying to attack people from fan companies. You're gonna get full health and benefits. The equity is the part where, like, look, again, if you’re Amazon and you’re making, you know, one hundred K, uh, four hundred K package over four years, one hundred K plus—you’re not going to have that liquidity.

And that’s the part where, like, you’re gonna have to clearly pull back. You’re also probably going to get restricted stock units, which are not like stock options. You cannot pay—you do not have money out of pocket.

It is effectively when the company has liquidity. Um, when the company has liquidity, you’re going to get paid out, uh, your equity is going to grow. 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, similar to just public stock, but RSUs are private stock with hopefully more ceiling and more room to grow in its tactics salary whenever it’s liquid. We have examples of YC companies like Revenue Cat, Fanta, Postdoc, Paves, if there's plenty of them out there.

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 put our, you know, money where our mouth is as a second or third round in the hopes that they will grow even more, and those would be our growth-stage investments like Brex, or—I mean, this is both growth and, you know, scale stage investments like Brex, Coinbase, Convoy, Gusto, Deal, 5 Tran, 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 Startup. We're going to talk really briefly about scaling, how to be cognizant of time.

Oh my gosh, hopefully, some people can run over Paige and I were like how much time is this gonna take, and I'm like, I'm talking too much. Scale: 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. Not may VCs are already in there, but the upside for VC is not really there as much as, you know, a hedge fund evaluation.

You should expect the equity to be at the public market. Like if you get an 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?"

And different companies have different ways of calculating that. 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 twenty-two."

I think they’re trying to tell a story that this thing will grow, and maybe it would. I just looked at it, "Okay, well, this thing went public at twenty-two, and that's what the public market values it at; I’d be happy."

And there was a point where it was like at fifty, and I was very happy, but then it was down at twenty again; you’re like, that’s reasonable. So I think if you go in with the right expectations of what this is 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, you know, if I were early at Lyft with a seed or Series A, where the value of the price per share was twenty-five cents, and it we're going up to twenty-five, and it went up a hundred X, I probably would be pretty happy, right?

Because I probably would have gotten a pretty decent size of the company, and 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. 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 to the whole thing and it grows, with each successive round, your stock is worth something.

All right, scale is like five hundred 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 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."

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 manage it and keep it growing. Internationalization has its own host of problems of like, you know, internationalization teams, language, going to market all over the place.

And you’ll also find just as you will with, you know, Fang companies, deep specialization. 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, 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—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 ten-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 prepping for your–”

You should be—the last thing startups versus large companies, why would you want to work at one versus the other? The biggest differences, again, generalists and specialists. Early-stage companies, you want to be a jack-of-all-trades; you want to have hands in 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 to figure out whether or not people wanted this API and like what made sense, versus later-stage company becomes specialist. You really like MongoDB, charting. Smaller companies, you have access to customers in the business, right? Like, everything is open.

Founders are having all-hands over beer with like twenty, thirty 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, you know, you have to just weigh the surface area of people that you're helping with what you're building as well.

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."

Operator opportunities to try new things—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, Rappi, Five-term Ducks. I'm not putting into a bucket as some kind of statement, but these are just the scale companies.

There’s also scale—scale, which I forgot, which is 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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