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Ask a Startup Data Expert - AMA

  • 1.  Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:01

    Hi Everyone!

    I'm Peter and I run the Insights team here at Carta. We are focused on discovering key narratives across the private market ecosystem.

    Prior to Carta, I was Head of Marketing for the media analytics company PublicRelay and also led the data visualization team at the Covid Tracking Project at The Atlantic during the peak of the pandemic. I love hiking and walking around San Francisco with my wife and corgi puppy Penny!

    Super excited to kick off this AMA - send me all your questions around startup valuations, equity, fundraising, anything and everything. I'll do my best to answer!



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    Peter Walker
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  • 2.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:10

    Hi Peter! A question for you: what are you seeing currently in terms of layoffs and hiring? We've seen a lot of news around Tesla and Meta layoffs, is that consistent across startups or focused mostly on larger corporations? 



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    Shawn Verobali
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  • 3.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:13

    Hi Shawn,

    So the data for startup layoffs and hiring isn't great either. Here's what we see for layoffs in particular (falling, but still high) and the hiring hasn't really picked up to start 2024. It's a tough tech job market out there for sure. 



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    Peter Walker
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  • 4.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:17

    Very interesting to see! Has fundraising returned to pre-pandemic numbers? Wondering if hiring/layoffs follow the fundraising numbers? 



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    Shawn Verobali
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  • 5.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:29

    Lots more on hiring in our State of Startup Compensation Report: https://carta.com/blog/startup-compensation-h2-2023/

    Funding is actually worse in many ways than it was pre-pandemic, which is definitely affecting hiring numbers overall.



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    Peter Walker
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  • 6.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:33

    Do you have any data on in-office vs. remote hiring? 



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    Magdalena Orowitz
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  • 7.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:36

    Hi Magdalena - not amazing data, but here's what we do know:

    This shows the percentage of new hires that were in the same state as the company HQ by hiring year and company valuation. Looks like in-state hires became a little more common in 2023. Now that doesn't really touch whether they were "remote" but it's a signal.



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    Peter Walker
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  • 8.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:39

    Interesting! Thank you for the response. 



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    Magdalena Orowitz
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  • 9.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:10

    Hi.



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    Kay Olmstead
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  • 10.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:16

    Hi Kay - I know you asked a question yesterday (pasted below)

    I think it candidly really sucks that this investor is suggesting you have to bring on a CEO of a different gender and ethnicity in order to fundraise. The data does show that more capital is fundraised by white, male CEOs - but this is your company. I don't have any good advice on whether it will work out but I believe personally it's your company and you know the product better than anyone else possibly could.

    Hi, Peter. I (CEO) founded a nanodrug delivery company 5 years ago (Nano PharmaSolutions) and we are ready for our first clinical trial for Parkinson's Disease. My background is Ph.D. (organic chemistry) and MBA. This Co is based on my own invention. We have raised >$4M in equity and about to start $10M Series A VC round. The Seed equity round lead investor sits is a director in our board (per the term). He has been raising loud noise that it is time to bring in external CEO with much experience in venture relations because I (an Asian female scientist, technical founder) am not what VC would like to fund. We operates on a cash conservative mode and I don't take salary, we have 3 FTE and many consultants. I can agree to his assertion that Series A will go quicker and better with a while male Caucasian who has done this many times with successful exits before. We are about to start a national talent search for this position...I am not sure how to pick one with confidence that it will work out (have not done this before).   



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    Peter Walker
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  • 11.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:20

    Thank you. Since we started a search, what should I look for other than obvious experience and connections to VCs? 



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    Kay Olmstead
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  • 12.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:28

    I'm sorry Kay - I don't have experience in searching for an external CEO and I wouldn't want to lead you astray with an incorrect answer here. 



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    Peter Walker
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  • 13.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:18

    A question: I am a "technical founder" and major share holder of a life science Co. My board is asking me to hire an external CEO who has a track record of raising Series A, B, and C round and exits. We started a search process. What are the top 3 qualities to look for before hiring an external CEO who are not a part of the technology nor company's spirit? 



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    Kay Olmstead
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  • 14.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:36

    I've heard plenty of people talking about how there is 'dry powder' sitting with VCs. Why aren't we seeing it used? Is fundraising actually as slow as it seems?  



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    Rose Jian
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  • 15.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:45

    Great question! Yes, fundraising is definitely as slow as it seems (see below chart).

    As to why dry powder isn't coming to help, here's my three ideas:

    1. A lot of it is being given to current portfolio companies in the form of bridge rounds and extensions
    2. Many VCs are deploying MUCH more slowly than before and their LPs are generally fine with that for now
    3. We need real exits in order to turn back on the momentum in private startups - so root for M&A and IPOs


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    Peter Walker
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  • 16.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:42

    Are there any trends in how founders are splitting equity? I know there are variables, but wondering if there's data to show what's fair. 



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    Daryl West
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  • 17.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:50

    We have a lot of data on that! You can find our full report from a little while back here: https://carta.com/blog/how-co-founders-split-equity/

    Overview - most founders actually end up splitting equity unequally. The median split between two founders is 55% to 45%., All the data in the report is a snapshot from before the companies had raised on fundraising



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    Peter Walker
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  • 18.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:55

    Hi Peter -

    I am curious what trends you are seeing for late stage private companies (granting RSU with double trigger) as far as vesting schedules for new hire grants and annual refresh ?  Our concern is dilution.  What trends are you seeing do late stage stick with the standard 4 year vesting schedule - 1 year cliff and refresh is quarterly over 4 years?   Are you seeing many starting to mimic trends from public companies such as 3 year vesting schedules?  

    Thanks appreciate your insight.

    Christie 



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    Christie Johnson
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  • 19.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 11:01

    Great question, Christie. 

    We don't see much change in vesting schedules even for late-stage private companies. The standard 4-year vest with a 1-year cliff and quarterly vesting periods is very much still the default. We have seen some major late-stage firms move to shorter vesting timelines but only a marginal percentage.



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    Peter Walker
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  • 20.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 10:57

    Got a question from a prior thread to answer here:

    We have the opportunity to be introduced to an advisor in our industry. Do you know what is the average amount of equity that is normal to give an advisor while in the seed round? Thanks!

    The standard advisor grant at the seed stage is between .05% and .2%, with the median coming in at .1%



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    Peter Walker
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  • 21.  RE: Ask a Startup Data Expert - AMA

    Posted 05-14-2024 11:19

    Really appreciate the questions everyone! Until next time, you can find more Carta data on the startup market by:

    Thanks for trusting us here at Carta!



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    Peter Walker
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