A Product Market Fit Show | Startup Podcast for Founders
00:28:37 · Peter Walker, Pablo Srugo
[00:28:37] S0: I can just do this. 100%. We're seeing a lot of that. We have, I think, at last count in 2026, something like 36 or 37% of the companies on Carta that joined us this year are solo founded. A lot of those companies will end up not being venture backed. So the venture backed percentage is probably more like a quarter maybe, But that's still very high relative to where it was ten years ago, and I just think we're gonna continue to see that expand. What I hope [00:29:05] S1: And what do we what what would it have been five, ten years ago? [00:29:08] S0: For the venture backed, it would have been, like, 10%. So it's it's more than doubled. [00:29:12] S1: What about the non like, if you just look at, let's say, three years ago, number of companies started by solo founders, venture backed or not, what would that have been, like, instead of 37%? That would have [00:29:20] S0: been more, like, 25%, 26, and now it's 35, 32. [00:29:25] S1: So it's still a 50% increase. [00:29:27] S0: Yeah. Over the last five years. Material increase for sure. What I hope is that these companies what I haven't seen so far, and what I hope happens, is that these companies that are being built by a solo founder grant equity to their early team in a different way. Like, there are just higher levels of equity granted to those founding engineers, etcetera. We really haven't seen it. I was expecting it to be like [00:29:48] S1: Interesting. [00:29:48] S0: The main way that a solo founder got to throw around their weight differently. Like, it's a competitive advantage. [00:29:55] S1: Yes.
00:29:55 · Pablo Srugo, Peter Walker
[00:29:55] S1: Yes. [00:29:55] S0: But I haven't seen it very much. So that's a shout to solo founders like, you know, if you have that extra 40% of equity, use it on the early team. [00:30:04] S1: And even in the you know, I I could see that in the non but if you look at the solo founders, the 25% that do end up venture backed, in that group, you're still not seeing a difference in terms of those first few grants relative to to your normal venture backed company? Not massively. [00:30:19] S0: I mean, they're a little bigger. They're not a lot bigger. Maybe the fact that they're a solo founder doesn't really play into that compensation conversation like there's other criteria. And I think it probably eventually should if you're competing with the same equity resources for another fantastic candidate that some other startup is super interested in. Or maybe I'm I'm missing a part of the market.
00:30:40 · Pablo Srugo
[00:30:40] S1: I would agree with you. But I would also understand again, and this is like, you look at the data first and you explain the story, but, like, it does make sense to me that it wouldn't just happen right away because a solo founder is certainly not gonna think, oh, I've got extra equity. Let's give it away. It's just not the mindset. They're gonna say, I don't care what I started with, what does it cost me to get a head of sales or a head of engineering or whatever it is that I need? Okay, cost this, I'm giving that, that's what I'm giving. But what might happen over time is the fact is if you give more, you can get more in terms of the bar. Right? That's just you pay more, you can get better talent. It's a very obvious thing. And so I'll give you an angle to tie back to this. I had a a solo founder who's a salesperson. You know, they they build. They have a few engineers that are doing the stuff, great great engineers. And then it just became obvious that they needed, like, a VP eng, a head of eng. And it was funny talking to trying to recruit someone and obviously talking to other founders to get like, hey, who do you know? That's great. And some people said to me, this this is a seed stage startup. They're like, why are you looking for a VPN? This is way too early for a VPN. I'm like, you have to understand that this was a technical founder. Like, you're a technical founder. Not only that, if you think about your average startup in your mind, you're thinking there's two or three founders, and one of them is a CTO or technical founder. In which case, yeah, a seat stage is way too early to hire a VPH. But you have to think of this more like if you're starting a company as a sales business person, it's very classical advice to get a technical co founder. Very classical advice. So if you're not gonna do that because you don't need to, and you don't wanna part with 30%, you're gonna need to fill that gap. There's just a bigger gap for you than somebody else. And then the question is, are you gonna go for your average? Let's say the grant is 2% normally for a VP inch. But if you're this hybrid co founder and you just need to fill that gap more, you can maybe reach up, that's the competitive dynamics that you're talking about, and do a 5% grant, maybe that becomes an edge.
00:32:28 · Pablo Srugo, Peter Walker
But, like, it it'll take time for I'm sure some founders are doing that, but it's like, for that to show up in the data because it becomes a standard thing that people do, I could see how that would take time. But it seems like a natural endpoint. [00:32:40] S0: Yeah. I mean, I I agree that the logic seems to make perfect sense to me. And I don't know why we haven't seen it more, but maybe as you said, maybe it'll take time. The other point on teams that I think is interesting is that there was a little bit of a wave that went through private tech when the windsurf stuff happened and, like, what it means to be part of an early team. I mean, I just think that startup employees, at least the ones that are super in the know, are like, hey. What is the advantage of me not starting my own company? You know, I think the the best alternative used to be work at Google, whatever. And now it's start your own thing. And I think that, like I I think hiring the number one, number two, number three engineer in the business has almost never been harder. Because the alternatives are so obviously, like, hitting you over the head. If you can be a founding engineer at a at a startup, why couldn't you be a founder?
00:33:29 · Pablo Srugo, Peter Walker
[00:33:29] S1: Although why like, actually, walk me through that. Because my thinking has been AI has changed product. It hasn't really like, obviously, AI agents, you can use them for go to market and stuff. But, like, I would argue getting a customer is not easier because competitively, everybody's doing it. So, like, getting customers no easier today than it was five years ago. It's still just as hard. What's gone easier is building the product. If you're a technical engineer, you're a technical founder, building a product's even easier than it used to be, let's say, because it helps you. But, like, getting customers, you know, I don't see how that's changed. [00:34:00] S0: I think that they kind of underrate how hard it is to get customers overall. [00:34:03] S1: Yeah. That's a different thing. [00:34:04] S0: That's probably one thing, which is a good point. The other part is just that it's not so much the equation has changed on how hard it is to be a founder or build a good business. The equation has changed on how valuable it is to be in the early team. You know, if if we get acquired, and for some reason, I'm not a part of the golden circle that gets taken to the next place, then I've accepted a lot of risk. Even if my equity grant is high, it's not it's kinda like a different sort of another variable on the equation. And I think it's there's a lot of acquisitions happening right now, mostly for AI talent. So I think there's candidly, I think there's a lot of companies quietly not saying it that are quietly being built to get acquired earlier.
00:34:04 · Peter Walker, Pablo Srugo
[00:34:04] S0: That's probably one thing, which is a good point. The other part is just that it's not so much the equation has changed on how hard it is to be a founder or build a good business. The equation has changed on how valuable it is to be in the early team. You know, if if we get acquired, and for some reason, I'm not a part of the golden circle that gets taken to the next place, then I've accepted a lot of risk. Even if my equity grant is high, it's not it's kinda like a different sort of another variable on the equation. And I think it's there's a lot of acquisitions happening right now, mostly for AI talent. So I think there's candidly, I think there's a lot of companies quietly not saying it that are quietly being built to get acquired earlier. [00:34:44] S1: I think that's a good point. I mean, frankly, the the monetary advantage of being an early employee has always been questionable. Like, that's just the reality of it. And then when you see acquisitions, kinda like side acquisitions that happen in a way where not everybody's compensated the same way, it just adds like fuel to a fire that's already it was not like a crystal like, I would say it's way more fun to work at a startup. I'm like all about small teams. You have more agency. There's a lot of upside, but like money is not one one of the will make more money at Google, more easily doing less. You just will. [00:35:16] S0: Expected value is much higher at Google than Google. Way higher.