The startup I work at announced its Series C fundraising today. I thought it worth writing down some thoughts in the moment as this is a special one I don't expect to relive very often, and I'm sure a lot of people out there must wonder what it is like to join a startup through one significant stage.

First a couple of disclaimers:

• I don't feel safe to be fully candid about everything I experienced and feel during this, so what you're getting is the extremely filtered story, more due to self preservation and abundance of caution in consideration of others.
• I'm not even naming the startup so as to make it a generic observation. Obviously you could figure it out. But I don't want to make this about any particular startup - I am just trying to make generally useful observations about how it feels to follow a company through these important stages in its life.

Ok now on to my takeaways:

1. It is well known that the actual fundraising usually takes place before the announcement.
   • A cynical perspective views this as a publicity device, for example to sell a message or to signal to customers or prospective employees. However I do see a strong case for delaying announcements so as to have a coordinated media push through press releases with preapproved quotes from key customers and investors, the sort of thing that you don't really think about when reading announcement blogposts but actually take a lot of wrangling behind the scenes.
   • It's also common that hiring tends to go up after a fundraising - not simply because companies have more money, but also higher goals are set and therefore more people are needed to get to those goals. Since careers pages are public, you can often see these pages grow before something is announced.
   • You also see careers pages and other pages get a facelift as the company prepares for the big announcement. This is a flaky indicator though, because of course it is trivial to queue up this facelift to be published alongside the announcement.
2. Career Capital
   • I've been told that being part of a well regarded company through this stage means something, you don't have to see it through to IPO or acquisition. I don't necessarily buy that since it's not evident what any individual person's contribution was, and anyway seeing things through is massively value creating.
   • But still it's not nothing, and people probably ascribe you more competence from your association due to the trackable rise in the company's metrics as inferred from public statements and the continued investment from VCs.
3. Options are not worth 0
   • Most people advised me to value options at near-0 when I joined, since startups fail all the time and even if they succeed there is a illiquidity discount that should be applied. However seeing a company through a stage can net you 5-6 figures in value, which is very much not zero
   • I think a Series B company with well known investors is quite derisked and you are essentially coinvesting with them as an employee (except you invest time instead of initial capital). Of course not a sure-win proposition, but much, much lower risk than the Seed-Series A stage. (duh, I know)
   • I hear that active secondary markets for startup stock exist, so it's not true that you have to hold to IPO in order to make money on your options.
   • I don't know anything about tax implications of revalued options, and now I have to find out
4. Becoming a "real company"
   • Investopedia has a good breakdown of what each stage roughly maps to in terms of a company's growth intentions - B is for Build, C is for Scale.
   • I've heard that there are revenue expectations for what each stage is supposed to map to, but I think the variance is so wide as to not be useful. You can't say "Company X just raised a Series A so they must be making at least $x M in ARR", it doesn't work that way. Too many factors, especially in the age of the Pegasus.
   • I've heard that around 50-100 people is where you start getting inhouse recruiters and HR folks. Checked out.
   • Company or Engineering "all hands" gets tricky. Dunbar's number is supposed to be 150 but I definitely stopped really knowing everybody's names, faces, and brief bios before that. Arguably my fault, and also the fact that we are remote. We did innovate around the format, and the 2-3 new formats I've seen are REALLY great and ones I quite enjoy.
   • Metrics are key to scaling. Picking a good mix of leading and trailing metrics are the key to timely surfacing issues. Having a healthy arms length attitude around metrics are the key to keep your people being long term greedy instead of doing things for short term wins.
   • Eng. Management, Career Ladders, Documented Policies for everything becomes a lot more serious and earnest.
   • I think it is a challenge balancing internal promotion vs bringing in senior talent. I am also at once aware that the ideal engineer to manager ratio is roughly 6-8:1, and wary that adding extra management layers can add rather than solve issues.
   • I find Career Ladders very helpful, and wish more companies simply publicly shared them so that we all as an industry know what each level is broadly expected to achieve. I think it can help our industry professionalize a lot quicker, and also help give more information on how the company is run to prospective applicants, while not really giving any secret sauce away to competitors.
   • I also find Documented Policies great, but of course Knowledge Management becomes key, so as to avoid uncontained sprawl of policy after policy and pretty soon you don't dare to lift a finger before checking 8 different memos on a thing. (No, not an actual issue at my company, I'm just projecting for illustrative purposes)

It's totally fine to feel some level of chaos still, at Series C. In fact I think it's a common trope that from the outside the progress can look so smooth, but employees can feel like things are a mess and yet stuff still somehow gets done.

Compared to Series B, this stage feels like the company is a lot less "fringe" - you get competitors directly copying your marketing copy and product design, and partners allying themselves with you because they think it will benefit them, not the other way around. You even get your first few haters. All good things.

While A->B->C seems a relatively well trodden path, I think D rounds and beyond are very dependent on the startup's cashflow needs. I have a less clear idea of what to expect after this round, than I did at the last. The best perspectives I've seen on how funding markets are evolving are from Tom Tunguz:

• https://tomtunguz.com/fundraising-environment-2019/
• https://tomtunguz.com/saas-round-sizes-2017/