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No, no, I'm sure your co-founder won't leave. No chance!

...but those other startups, they might have some relationship issues 😬

Here's the data. Criteria for inclusion:

• We looked at 22,352 founders who were in 2 or 3 founder teams.

• US startups incorporated between Q1 2016 and Q2 2023.

• Had raised at least 1 round from VCs.

The percentage in each row is the percent of founder who had left their companies over time. So for instance, for founders who got started in Q1 2017, 17.1% had left after 3 years.

𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗦𝘁𝘂𝗳𝗳

• Looks like co-founders leaving is getting more common in more recent years. Nearly 1 in 4 founders had gotten out in 3 years for late 2021-era startups.

• Is that increase in co-founder departures due to some underlying change in company structure - or is it just a reflection of the difficult fundraising environment post 2021?

• Typically founders have a 4-year vest on their shares. That means that about a quarter of founders will leave before their vest is complete (although it may be a higher if the vest didn't begin until the first VC round).

• Obviously 𝗲𝘃𝗲𝗿𝘆 𝗳𝗼𝘂𝗻𝗱𝗲𝗿 𝘀𝗵𝗼𝘂𝗹𝗱 𝗵𝗮𝘃𝗲 𝗮 𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘀𝗰𝗵𝗲𝗱𝘂𝗹𝗲 𝗼𝗻 𝘁𝗵𝗲𝗶𝗿 𝗲𝗾𝘂𝗶𝘁𝘆. But the question of vesting schedule length has come up more frequently of late. Should founders move to a 5 or 6 year vesting schedule? I hear some VCs proposing this idea but most founders reject it outright.

• This data is probably undercounting co-founder disputes, as sometimes a riff between founders actually kills the business outright.

• This is, of course, a supporting pillar in the case for solo founders. No potential co-founder conflict to deal with! Not every business needs a founding team.

The biggest choice you'll ever make at your company is: who are you building with?

#startups #founders #cofounders

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Headcount across US startups is in a deep freeze.

The data (from across more than 45,000 US startups that use Carta) is startling.

We looked at net headcount change over time across the entire company population. So for each month we took total new hires then subtracted the total number of departures (includes both departures by choice and through layoff, firing, etc).

𝗧𝗵𝗲 𝗗𝗮𝘁𝗮 𝗦𝗮𝘆𝘀

• Since the start of 2023, startups on Carta have only added 31,000 net headcount to their payrolls.

• From 2019 through 2022, startups on Carta added 865,000 net headcount!

• From 2019—2022, we saw only 2 months where net headcount declined.

• We've seen 12 such months since the start of 2023

𝗪𝗵𝗮𝘁'𝘀 𝗛𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴

• Obviously interest rates changed in 2022, startup funding dried up, layoffs increased. That explains the initial drop in net headcount.

• 2023 and most of 2024 were about belt tightening. More layoffs, yes, but also an increased focus on capital discipline, headcount management, and the new favorite metric of ARR per employee. Do more with less was the mantra.

• Mid-2024 through today...is this the impact of AI? Are startups trying to automate roles they would have previously hired for? I think yes.

Startups are smaller at each stage than they have been in 6-7 years. The average Series A startup raising in 2025 had just 14 full-time employees (down from 22 in 2022).

Good for companies building sustainable businesses. Bad for candidates trying to get in to those companies.

Is there a plateau ahead or will these declines simply march onwards toward the Altman Horizon (1 employee, $1 billion in valuation)?

Tricky times out there.

#startups #startuphiring #startupjobs #founders

Data from our data vault out every Thursday - subscribe at the link in graphic for more.

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Startup founders - don’t be surprised if VCs aren’t impressed with your ARR these days.

$1 million in ARR in 2021 = intros to Series A VCs

$1 million in ARR in 2025 = ...seed talks? Keep us updated? Who knows!

One of the biggest questions around VC-backed startups these days is the reliability of revenue. In the AI era, we've seen companies rocket towards major ARR figures in a period of months.

But will that revenue endure? Are many of these contracts part of experimental budgets from major corporations that could be turned off in an instant?

Really loved digging into this with Brianne Kimmel, one of the sharpest early stage VCs I know. Her response perfectly captured the framing to today's ARR moment:

𝗥𝗲𝗻𝗲𝘄𝗮𝗹𝘀 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗿𝗲𝘃𝗲𝗻𝘂𝗲.

Feels like just another hurdle to climb for would-be VC founders, but it's critical that VCs feel some confidence in the repeatability of your current customer base.

AI tossed all these standard models into the air and we're waiting for things to shake out to a "new normal". We could be waiting a long time.

Full episode: https://lnkd.in/dE8pdnvU

#startups #AI #ARR #venturecapital #Seed #SeriesA

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Will OpenAI change the the way startup equity works for everyone?

Unlikely. But this move is still pretty interesting.

Eliminating the vesting cliff on their employee equity means that if you join OAI tomorrow, you start getting real equity from day 1. No waiting around for a year for the first 25% of your equity package to become real.

Why would they make such a drastic move? The 1-year cliff has been a retention mechanism for decades among tech startups.

• They face immense competition for research talent, usually from the most well-capitalized firms in the world so they must think...

• Missing out on top talent for any reason is a bigger risk to the business than having someone walk away after 6 months with a considerable sum of money.

• The equity they offer is way more liquid than the equity at your standard startups (or even late-stage scaleup).

Pretty sure that most startups will not follow suit here, but it highlights the massive gap between in-demand AI talent and everyone else these days.

The average comp package for a startup employee hired in 2025 is actually 50% lower than it was in 2022 (and not because of startup valuations - we're talking literal share amounts here).

But the compensation for AI/ML engineers is up 30%+ in the last 12 months alone.

Haves vs have-nots. In hiring, in fundraising, in every part of the venture market.

Maybe 2026 is the year where we see even early-stage startups experimenting with new versions of the standard 4-year vest with a 1-year cliff model.

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Friday Q&A: what does a seed round mean in different states?

Tip of the hat to John L Seamans for this question. If you'd like your own question answered next week (from the deep Carta data sets), ask it in the comments!

So - does it matter where I raise my seed round?

Short answer: yes.

On the map below, the number next to the state abbreviation is the round count and the bold figure is the median valuation.

Median pre-money valuations in California were $15M in the last 6 months or so. In Texas, similar rounds went for $14M. In New Jersey, it drops to $12M.

And the valuation isn't the only factor. Median round sizes are also higher in CA and NY. For instance, the median seed round in CA raise about 2.5x as much money as the median seed in Colorado.

Deep networks are hard to beat. However, industry vertical matters quite a lot. Biotech raises in MA seed rounds actually came in at higher valuations than those in the Bay Area.

Bottom line: you don't have to be in Silicon Valley to raise your seed round. But you should adjust your expectations heading into fundraising conversation to your local ecosystem.

John, hope this helps! Sorry we didn't dig into healthtech in particular.

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#cartadata #seedround #seedstage #fundraising #venturecapital