Startups regularly underestimate how difficult hiring gets, especially after an expensive Series B/C. 1. Mission matters more. The people who join you at Seed/A might want to build a sales intelligence tool because they like seeing 0 to 1. They know that once this gets big, they’ll take home a good chunk of change. After a B/C, they think “is this really what I want to be working on?” 2. Financial incentives are lower. You easily see a path for a $30M valued startup to 10x. Usually this means going from $0 to $10M in revenue. Seeing a path for a $1B valued startup to 10x is far harder. It can mean going from $10M to $200M+ in revenue. And given the incrementally lower equity employees get, they’re counting on that 10x. 3. You attract a very different persona. They’re usually more risk averse and riding on the coattails of the success and name your company has already built. Culture can easily dilute if you’re not careful. The builders get replaced by the certain kind of BigTech person who wants “startup experience” without taking on the risk. They might still be smart, so it’s tricky to catch in any sort of technical interviews. 4. Culture degrades with size. It’s almost by law. In the beginning, you’re under 50 people. You’re all working on a startup you stood up from nothing. This builds a strong sense of camaraderie. As you go to 200 people, your early builders become managers. You start seeing more and more unfamiliar faces in the offices. At some point, you don’t even know everyone in the company. Everyone is eager to do “new” things and leave their mark, but what needs to be done is quite straightforward. The sales team feels like a different kind of person that takes up half the office. You’re eagerly watching the revenue, and your emotions ride on the back of it now, not the joy of creating. Management is in disarray. Now, projects keep getting killed. People keep getting roped into a new “customer issue” and can’t do their main project. New employees feel like this isn’t the culture they signed up for. Old employees feel like they work as hard as they used to from day 1, but the new employees treat this like a “job”. You get your first set of departures. Morale is low. Lunch banter shifts to “what if we just went to instead?” Keeping the company from tearing apart at the seams seems like an insurmountable task. Growing past these rounds can be very challenging and many founders are left blindsided. The awesome company they once had can quickly become a shadow of its former self. And it’s a stage which often separates the elite founders from the great ones. The answer here is usually having a mission worth going the distance for or a culture worth fighting for.

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AI startups are securing compute before the model race is fully visible. Reuters reported that Reflection AI @reflection_ai signed a more than $1B compute-capacity deal with Nebius @nebiusai, including access to Nvidia’s latest chips. Reflection was founded by two former Google DeepMind researchers and is building open AI models as an alternative to closed frontier labs. The Nebius deal follows Reflection’s earlier compute agreement with SpaceX, which TechCrunch reported could be worth up to $6.3B through 2029.

AI startups are moving from fundraising headlines to product tests. Thinking Machines Lab @thinkymachines, founded by former OpenAI CTO Mira Murati, has released Inkling, its first open-weights AI model. The company says Inkling is built as a customizable foundation model. It can be fine-tuned through Tinker, Thinking Machines’ platform for adapting models to specific workflows. The next AI platform battle may not only be about who builds the most powerful model. It may also be about who gives companies more control over how AI is customized, deployed and used. Source: Thinking Machines Lab / WSJ