If you’re graduating this spring and starting a career in tech, I’ve got one piece of advice: go work at a midstage startup (I’ll define that as B/C rounds of financing— i.e. Twilio, Stripe, Airbnb, Warby). Here’s why:
Past the point of product market fit, but before large company ossification. At a brand new startup you spend all your time trying to get the world to care about your product and fighting a lack of infrastructure. At a more mature technology company you’re protecting and extending your business model. Between the two is a hypergrowth stage where your initial product has great traction but there’s still urgency and risk in execution. You have the resources to build and launch, which means your work will see the light of day. Instead of just concept mocks and ideas for marketing programs, you can get real data and feedback on your team’s efforts. The skills you learn are likely generally transferable because the company isn’t so far down the path of only doing things their way.
Midstage startups are still very much under-resourced and expanding. They’re spinning up new teams, creating new org structures. There aren’t yet four layers of management between you and the founders. As you prove yourself you’ll be tapped to lead new teams, launch new offices and everything else which goes into scaling a successful business.
The founders and early team are still in place because there hasn’t been a liquidity event and the work is still exciting for them. These folks—plus your new peers—will most likely spend the next 20 years as your friends, managers, employees, VCs, cofounders, etc. Building a tight and high quality network early in your career is much more valuable than any fancy title or nearterm compensation. From folks a few years more experienced you’ll get mentorship and learn good habits.
Options are lottery tickets and most aren’t worth much when you net out the lower cash compensation compared to what a Google would pay you for the same role. However, midstage startups have gotten past some initial value creation milestones and likely have a much greater chance of growing 10x into a nearterm liquidity event within 2-3 years than a newly funded company would. If you’re lucky enough to get a few hundred thousand dollars in your bank account within a few years of graduation, you may approach the rest of your career differently.
Besides just being associated with a high performing company I’ve noticed this weird thing we do in tech. We tend to think much more highly of the folks who were “pre-IPO” or “pre-acquisition” than those who might have joined the team right after. Don’t think it makes total sense but hey, make it work in your favor.
Now you might think it’s strange that a VC who runs a seed stage fund is telling new grads to join larger startups. I’m actually trying to steer folks who might join, say, Facebook, to consider midstage startups (and when you’re ready to start your own company, I’m hoping you’ll come see me). And those who want to join an early stage company for the wrong reasons should realize it’s an uphill battle. The folks who are going to be the best early stage team members won’t change their mind just because some investor with a funny name wrote a blog post. If you happen to be one of these people who I haven’t convinced, please let me know so I can connect you with a Homebrew company.