Trends in Startup Development

Y Combinator is widely regarded as the most successful startup accelerator in the world and the top choice for world-class entrepreneurs. They've helped incubate more than 90 unicorns, 45% of their companies go on to raise a Series A (higher than the 33% average), and the combined market cap of their startups is currently over $600B. To honor the final day you can apply to Y Combinator’s first-ever Spring batch (i.e. X25), I teamed up with past collaborator Palle Broe on the most in-depth and intriguing analysis you’ll find anywhere of the world’s most successful startup incubator. Palle spent over 100 hours (!!!) digging through all available public data to pull back the magic that is YC—so that others can learn from their success. Key takeaways 1. YC has gone from being a Consumer investor to primarily a B2B investor. Consumer companies have resulted in over $200 billion of market cap, while B2B companies are currently privately valued at some $170 billion and are on the rise. 2. Based on batch profiles, founders are betting on AI (specifically, B2B AI) to be the next big thing. The most promising subcategories include “Engineering, Product, and Design,” Infrastructure, and Sales. 3. Solo founders are at a disadvantage. Although solo founders are encouraged, the data does show a steep decline in the number of them accepted to YC. 4. Success has so far been driven by U.S.-founded companies. More than 70% of the startups have been founded in the U.S., and to date, 99% of returns have come from the U.S. 5. The durability of YC companies is significantly higher than that of the average startup. More than 50% of companies are still alive after 10 years (vs. 30% average). 6. The chances of startup success are higher with YC. 45% secure Series A (vs. 33% average), 4% to 5% become a unicorn (vs. 2.5% average), and 10% achieve an exit. 7. The VC power law also exists at YC. Four companies account for more than 85% of YC’s returns to date: Airbnb, Coinbase, Reddit, and Instacart. 8. The investors in YC companies are the “crème de la crème.” Tier 1 VCs frequently invest in YC companies, and some have made several hundreds of investments. Here's the full post: https://lnkd.in/gR8mr5XT

Founders - your peers are selling about 20% of their companies in a seed round and another 20% in the Series A. This target ownership figure seems to be dictating a lot of the dynamics around valuations and fundraising amounts, as it remains relatively stable year over year as valuations rise and fall. Data below is for software companies raising priced rounds (just primary rounds, no bridge funny business). Over 9,600 rounds included, US only. Note that these figures don't touch on the expected dilution for hardware, biotech, or medical device companies. If you'd like that graphic, shout it out in the comments! 𝗗𝗶𝗹𝘂𝘁𝗶𝗼𝗻 𝗧𝗿𝗲𝗻𝗱𝘀 • 20% (or just above) is the median for seed and Series A, has been since 2021.    • Something just under 25% is the 75th percentile value for seed and A over the same time frame (so anything above 25% is pretty significant dilution).    • The least-dilutive deals are going off around 15% or so for seed and A.    • Structured terms (things like liquidation multiples over 1x or participating preferred stock) remain rare at seed and A, so these dilution numbers aren't masking underlying difficulties.    • 𝗙𝗲𝘄𝗲𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗮𝗿𝗲 𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗼𝘃𝗲𝗿𝗮𝗹𝗹 𝗶𝗻 𝟮𝟬𝟮𝟰 than did so in say 2021. These "missing deals" explain a lot of the dilution stability (in that the deals that may have dragged median dilution higher just aren't getting done these days). At the early stages, dilution is the metric that informs the rest of the fundraising values. VC funds typically go into potential deals with a target ownership in mind, taking into account the need for founders to remain incentivized as well as the expectation of future dilution from more fundraising. So 20% held steady even as valuations ballooned up in 2021 AND kept holding firm as valuations declined in 2023. Ownership > Valuation in negotiations, effectively. Really interested in digging into the composition of these dilution figures in later graphics (are single firms increasing their ownership? Are deals happening with more participants lately? Etc). But if this sparks other questions for you, let me know below. Don't miss any data from the Carta trove in our weekly Data Minute newsletter --> subscribe at the link in graphic! #startups #dilution #founders #venturecapital  

If you’re building a company or trying to figure out how to grow it fast, this is for you. Today, we’re breaking down 7 GTM motions (with 28 guides) from top companies. And we've brought expert Maja Voje to help. Here’s your roadmap to mastering Go-to-Market: — 𝗔 𝗣𝗥𝗜𝗠𝗘𝗥 𝗢𝗡 𝗚𝗢-𝗧𝗢-𝗠𝗔𝗥𝗞𝗘𝗧 𝗠𝗢𝗧𝗜𝗢𝗡𝗦 When it comes to Go-to-Market (GTM), it’s all about the right combination of motions. From driving virality to closing enterprise deals, each motion is a tool that you can leverage to unlock growth. And while it may seem like a mystery, every successful GTM strategy shares key elements you can master: → What works at scale → Knowing where to focus → Scaling your team right — 𝗖𝗛𝗔𝗣𝗧𝗘𝗥 𝗢𝗡𝗘: 𝗕𝗥𝗘𝗔𝗞𝗜𝗡𝗚 𝗗𝗢𝗪𝗡 𝗧𝗛𝗘 𝗠𝗢𝗧𝗜𝗢𝗡𝗦 𝗢𝗙 𝗧𝗢𝗗𝗔𝗬'𝗦 𝗧𝗢𝗣 𝗚𝗥𝗢𝗪𝗘𝗥𝗦 We analyzed 12 of the hottest tech companies and found 3 common patterns: 1. PLG is taking over ↳ 80% of top companies now use (PLG) as their primary or a major supporting motion. ↳ Even enterprise giants like Salesforce are embracing it. 2. Multi-channel is essential ↳ No company relies on just one motion. ↳ On average, these companies use at least 3 channels to support growth. 3. ABM and Outbound are king for enterprise ↳ In high-ticket sales, Account-Based Marketing (ABM) and targeted outbound motions dominate. ↳ This is how five and six-figure deals get done. 𝗕𝗥𝗜𝗡𝗚𝗜𝗡𝗚 𝗜𝗧 𝗔𝗟𝗟 𝗧𝗢𝗚𝗘𝗧𝗛𝗘𝗥 → Start simple If you’re selling to consumers, lean on PLG, community, and partnerships early. → For SMBs Combine inbound and outbound motions for awareness and relationship-building. → For Enterprises Focus on ABM and outbound, with inbound as a support. — 𝗖𝗛𝗔𝗣𝗧𝗘𝗥 𝗢𝗡𝗘.𝗢𝗡𝗘: 𝗛𝗢𝗪 𝗧𝗢 𝗞𝗡𝗢𝗪 𝗪𝗛𝗜𝗖𝗛 𝗠𝗢𝗧𝗜𝗢𝗡𝗦 𝗧𝗢 𝗣𝗥𝗜𝗢𝗥𝗜𝗧𝗜𝗭𝗘 1. Talk to your customers ↳ Find out how your buyers made their last purchasing decision, including the channels they used and decision drivers. ↳ Ask what content, demos, or touchpoints had the most impact on their decision. 2. Research your competition ↳ Use tools like SimilarWeb, SEMRush, and BuiltWith to analyze your competitors' traffic sources , GTM motions, and untapped opportunities. 3. Play on your strengths ↳ Assess the channels where your team already has proven skills and experience and double down on it first. 4. Select 2-3 GTM motions to test ↳ Prioritize the channels that align best with your product and target audience for the highest potential ROI. 5. Stick with them for 1-3 months ↳ Track progress consistently, making data-driven adjustments without switching strategies too quickly and iterate on what works. — 𝗖𝗛𝗔𝗣𝗧𝗘𝗥 𝗧𝗪𝗢: 𝗧𝗪𝗘𝗡𝗧𝗬 𝗘𝗜𝗚𝗛𝗧 𝗚𝗨𝗜𝗗𝗘𝗦 𝗕𝗬 𝗠𝗢𝗧𝗜𝗢𝗡 If you want to master all 7 motions — with detailed breakdowns, examples, swipe files, and the tools to execute them — the breakdown is in the comments 👇.

Sam Altman, the co-founder and CEO of OpenAI, made a provocative statement at a JP Morgan conference earlier this year. He believes a solo founder will soon reach a billion-dollar valuation without hiring a single employee. This one-person company would instead be powered by AI and “employ” dozens of AI agents to do the work. Not only do I believe this is entirely possible, but I think when it does happen, the company will be one of the fastest-growing unicorns ever. As I invest in AI-powered startups and teach my students how to use AI in their businesses, I have identified 5 general AI use cases that align with critical phases of the startup journey: 1. Research-Driven Ideation: The genesis of any successful startup is a deep understanding of market needs, pain points, and the competitive landscape. My colleague Scott Brady of Stanford calls this process Research-Driven Ideation (RDI). There are now AI-based tools for competitive analysts, automating competitive monitoring for senior managers—effectively Google Alerts on steroids, tracking personnel changes, marketing launches, traffic, and other publicly available data. 2. Customer Persona Development and Market Research: Understanding your target customer is crucial. Gen AI helps founders create multiple hyper-specific customer personas by analyzing customer data and building hyper-realistic, "living" customer personas to test key hypotheses quickly. 3. Experimentation and Validation: Gen AI facilitates rapid experimentation to validate key hypotheses such as CVP, GTM, and PF by enabling deeper business data insights and rapid prototyping. I have a founder friend who lost his technical cofounder and has been using ChatGPT to build his MVP. By learning to be more effective at writing prompts to generate the desired code output, he has been able to continue building as a solo founder. He told me, “The result is that my burn rate is incredibly low, and velocity has shot through the roof.” 4. Marketing and Customer Engagement: Founders will see major productivity boosts in marketing, community building, and sales prospecting. Flybridge has a portfolio company that builds super smart AI agents that can be used for just about anything. One of their customers trained their agent to automatically generate customized sales collateral and follow-up materials based on customer needs that a sales representative inputs into the system after a prospect call—and then the AI agent sends that tailored material to the customer. 5. Continuous Learning and Iteration: The path to PMF is iterative. Gen AI supports continuous learning by analyzing customer feedback and product usage data to improve their product, GTM, and onboarding processes quickly. How are you using AI to build your startup?

The most interesting trend in today's M&A landscape is... The explosive growth of private-to-private (mega) acquisitions. OpenAI's $6.4B acquisition of Jony Ive's io is the largest private-to-private acquisition of all-time by a cool $2.5B over second place. Over 40% (7) $1B+ private-to-private acquisitions have happened in the last year. OpenAI, Databricks, and Stripe have each spent over 15% of their total funding to date on acquisitions in the last two years. The latest data adds context to several hypotheses floating around social channels and investor circles: 1) The biggest private companies are *happily* operating at public company scale 2) AI is driving mega M&A deals in a mad dash for tech moats and full-stack offerings 3) AI talent wars are fueling the world's most expensive hiring strategy 4) Private-to-private M&A is increasing What's next? Or for a more pointed/predictive version of the question... Who is Anthropic going to acquire*? *Acquisition matrix incoming cc Katie Roof and her latest article for Bloomberg

Something interesting is happening in startup world. I'm noticing founders more interested in learning about: • Marketing strategy • Content creation • Creator partnerships • Community building Than: • Product development • Tech infrastructure • Feature optimization Five years ago this would've been considered crazy, especially in SF. Today? It might actually be the smartest move. Think about it... AI can help you copy any product feature. Tech is becoming less of a moat every day. Infrastructure is getting easier and easier to replicate. But you know what's getting harder to copy? • Real community • Owned distribution • Brand trust • Founder+Audience empathy I'm watching VCs quietly shift too... Instead of asking "How sticky is the product?" Now they're asking "How are you thinking about distribution?" The startups winning right now? They're not winning on tech. They're winning on brand & reach. Because in 2025, the best product doesn't win. The best distribution does. #startups #entrepreneurship #business

Bigger seed rounds were once considered clear markers of startup success. However, fresh data reveals that leaning too heavily on seed funding now correlates to hardship. Analyzing startups raising priced seed rounds from 2017-2021 shows the percentage reaching Series A within 2 years has plunged recently. Graduation rates dropped from 27.5% of 2019 cohorts to just 17.6% of 2021 companies. This downward trend persists across sectors like fintech, biotech and SaaS. The data exposes how bloated seed raises set overoptimistic expectations that leave founders brutally exposed when capital vanishes. h/t peter walker and carta

Founders, hear me out: There’s ₹20,000 Cr available to help your startup. This is real money, ready to be invested. I’m talking about the Fund of Funds for Startups (FFS). This government initiative supports the startup ecosystem and has already had a huge impact. FFS doesn’t invest directly in startups; instead, it funds SEBI-registered AIFs. These funds, in turn, invest in startups. The interesting part is… ✅ For every ₹1 that FFS contributes, AIFs must raise at least ₹2 from private investors. ✅ Startups like Dunzo, CureFit, FreshToHome, Unacademy, Zetwerk, and more have been funded through this initiative, with many seeing valuations increase 10x or even reaching unicorn status. ✅ The returns generated from these startups stay within the country, creating jobs and wealth (the best part). So, how does your startup get in on this? It’s all about connecting with the right AIFs. These funds are the key to getting access to the capital you need. Here’s what you should know: 1/ Find the right AIFs. Identify funds aligned with your industry and growth stage. 2/ Get your paperwork in order. Ensure financials, compliance, and documentation are investor-ready. 3/ Have a growth story. Show them you’ve got a business that can scale. 4/ Stick to the deadline. Timing is everything when it comes to this funding. Many founders miss out because they are unaware of the AIF process or do not have their documents ready when they apply. The Fund of Funds for Startups is a great opportunity to raise capital without losing too much equity or control. So, if you’ve got a startup that’s ready to scale, don’t leave money on the table and start exploring AIFs today. #startup #growth #Govinitiative 

Yes, every startup is a beautiful, unique snowflake, but here is how I'd approach the stages of marketing for most orgs. Marketing is about building a layered, connected ecosystem where each channel supports and amplifies the others. Here’s how I think about the foundational sequence of channels to create a scalable, efficient, and impactful marketing strategy: 1️⃣ Start with Paid Search & Organic Content Why: Paid search (Google Ads) captures high-intent, in-market traffic—people actively searching for solutions you offer. -Shorter sales cycle and amazing fuel for all your other efforts. Organic content (e.g., thought leadership videos) builds trust and authority over time, setting the foundation for long-term success. This style of content (TL Videos) also makes great ads and improves the impact of other channels like LinkedIn, Meta, and Programmatic. 2️⃣ Activate LinkedIn Ads (start with retargeting) Why: LinkedIn is unparalleled for B2B targeting. You can layer on company size, job titles, and industries to reach decision-makers directly. Impact: Use LinkedIn to qualify and convert paid search traffic (or traffic from any source), leveraging retargeting frameworks to make your entire ecosystem more efficient. Doing LinkedIn ads before you have paid search, organic content, and SEO is going to result in a very expensive experiment. 3️⃣ Enhance with Website Visitor Identification Why: You don’t need to wait for prospects to fill out forms. Identify companies and individuals visiting your site, enrich the data, and turn anonymous traffic into leads. (I recommend DemandSense - ask me for free trial form.) Impact: Get more value from existing marketing efforts and create "nearbound" flows. 4️⃣ Launch Nurture + Outreach Campaigns Why: Most B2B sales cycles require consistent, personalized touchpoints. Combine LinkedIn and email to warm up leads and build trust over time. Impact: A well-orchestrated nurture sequence ensures no lead slips through the cracks, while outreach activates high-potential accounts. 5️⃣ Expand with Meta + Programmatic Ads Why: Meta (Facebook/Instagram) and programmatic platforms extend your reach, ensuring your message follows your audience wherever they go. Impact: Create omnipresence and retarget warm audiences from LinkedIn and search, converting them faster and more efficiently. Why the Sequence Matters? Each channel is more than a standalone tactic—it’s a building block in a larger framework. The foundation of paid search and organic content ensures you have an engine for consistent visibility. Then, LinkedIn ads and website visitor IDs provide a direct path to your ideal buyers. Finally, nurturing and omnichannel expansion amplify and accelerate conversions. This approach creates a flywheel effect where channels complement each other, increasing overall efficiency and ROI. What do you think?

Top 5 Biggest Equity Comp Trends Yesterday, David Knopping (Founder of Alpine Rewards and former President of Radford) and I did a webinar on the biggest trends in the world of Equity Compensation. In general, we are seeing more equity comp program design innovation over the past few years than we have seen in the previous decades combined. Many peers are calling it “The Great Equity Comp Renaissance”, driven largely by macro forces such as depressed valuations and higher interest rates. Equity is no longer viewed as “free lunch”. Companies are becoming more targeted with whom receives equity as well as how much equity they receive. Comment below with your email or DM me if you’d like access to the full deck (with 22 total data insights) + webinar recording and I will ensure it gets sent to you. ____________ My Top 4 Takeaways: 1️⃣ Equity Burn – Private vs. Public dichotomy. (Chart 1) Public company burn benchmarks skyrocketed in 2022/2023 but have quickly come back to reality in 2024. Private company burn benchmarks, meanwhile, have stayed relatively flat through the ZIRP and high-interest rate eras. I call out equity burn first, because it lays the groundwork for why so much equity comp program design innovation is happening–especially among public companies. Suddenly, equity has begun to feel like an alarmingly scarce resource…and this drives innovative practices as companies seek to “do more with less”. 2️⃣ Vesting trends. (Charts 2, 3) The fastest moving trend is the accelerated adoption of shorter (2 and 3 year in particular) vesting durations by public companies. Private companies, meanwhile, are mostly still stuck on 4 year vesting durations despite the vocal minority of outliers that make the headlines. There is also a small uptick of public companies adopting accelerated (aka front-loaded) vesting schedules, but it is not as rapid of a rise in popularity as the adoption of shorter vesting durations. 3️⃣ Equity eligibility trends. (Charts 4, 5) Equity eligibility benchmarks are generally bi-modal; companies either give equity to ~90%+ of all new hires OR they aggressively use job function, job level, and location to target equity eligibility at specific cohorts of employees. Performance is also a key dimension being more aggressively adopted these days for refresh/ongoing grants–both for refresh eligibility as well as refresh grant size. 4️⃣ Equity discount trends. (Chart 6) Interestingly, equity comp geo discounts (as well as job function discounts) are larger than the requisite cash discounts. Folks were surprised by this finding on the webinar yesterday. For instance, the geo discount–normalized by job family and job level–for base salary from Tier 1 USA to Tier 3 USA is 18%...meanwhile, the same geo discount for new hire equity is 40% (!). Yes, this means that your P4 SWEs in Oklahoma City likely aren't expecting/commanding the same sized grants as your P4 SWEs in SF. #pave #equitycompensation #benchmarks #trends