Expectations for Working at Tech Startups Throughout the Stages

Working for a tech company at different funding stages comes with varying expectations and experiences. Here’s a breakdown of what you might expect at each stage:

Pre-Seed and Seed Stage

Expect this:
A lot of uncertainty and almost constant pivots—the company’s product-market fit is still being validated. You’ll have small teams: Often a tight-knit group where each member wears multiple hats. A lot of resource constraints—limited funding means tight budgets and potentially lower salaries and benefits. Above all, a Fast-Paced Environment™. There’s rapid iteration and pivoting as the company seeks to find its niche—which can feel like massive instability, a lack of cohesive strategy, and so forth. That’s part of the fun of this stage—if you find that kind of thing fun.

Your experience:
You’ll have broad responsibilities. There’ll be opportunities to work on a variety of tasks and directly impact the company’s direction. You’ll have close interaction with founders. There’s High risk and reward,** meaning there’s maximum potential for equity gains if the company succeeds, but also a higher risk of failure.

Series A

Expect a lot more formal product development. The focus on building and refining the core product or service. Market expansion as you’re beginning to scale and acquire initial customers. This still involves a lot of pivoting, because whatever product-market fit you think you’ve found will very likely need a lot of adjustment as you begin engaging your first customers. Also expect a lot of team growth, in hiring new team members to build out key functions (e.g., engineering, sales, marketing).

This is where employee specialization begins, with more defined roles, but still a chance to work across functions. You’ll start building processes, establishing more structured processes and workflows. But you’ll get them wrong. They’ll change a lot. In terms of equity, stock options are still significant, though slightly less risky than the seed stage—so expect them to have a bit less upside value.

A big note: A company that’s established itself in one market might be at Series B or even C—but if it tries to break into a different market, might find itself back in “Series A mode.” That’s not a step backwards. It just means that different markets need different things and have different problems; as you shift to solving different problems, you’ll need to go back to being agile, innovative, and experimental, just like all good Series A companies.

Series B

Key Expectations: You should be scaling operations, often with an emphasis on scaling the product and market presence. Revenue growth will be key, with a significant focus on revenue generation and customer acquisition. You’ll be spending a lot of time and money on that. Finally, even more team expansion, usually with rapid hiring to support growth across various departments.

What’s the experience like? Defined roles. Everyone is more specialized and clearly defined job responsibilities—and this is where you might see some of your Series A colleagues leaving, especially ones that much prefer to wear many hats and be good at a lot of things. Overall, you’ll see a more structured environment, with more established processes and possibly (probably) the introduction of middle management. Finally, perks and benefits will start to solidify, with improved benefits, compensation packages, and workplace perks.

Series B companies usually feel they’ve got it all figured out—but often in a very limited market. For example, a Series B company might be selling mainly to other tech companies. It’s when the company starts to change its customer focus—toward the end of Series B is usually when you start eyeing the Fortune 1000—that you’ll realize your so-called product-market fit wasn’t a Universal Truth.

There are a lot of things a company should get right before its Series C round, although a lot of companies don’t. In my mind, you’re Series B until:

• You’ve tested your product-market fit with at least a couple of large enterprise customers.
• Your revenue model is compelling to investors, and you’re hitting good trend lines on key metrics like customer churn, recurring revenue, gross profit margin, etc.
• You’ve established a market presence—people in your space largely know who you are..

Series C and Beyond

This is where you meed to start firming up market leadership, meaning you’re pushing to become a leader in the market and expanding into new markets. You’re gaining operational efficiency, optimizing operations and possibly preparing for an IPO or acquisition. You’re learning to work consistently and at scale, although you might not be there yet. Finally, and this is a big one, you’re engaging product diversification, meaning expanding the product line or services offered.

In our current world, it’s not unusual to see Series B companies attack only one market, and wait until Series C to start expanding. It’s unfortunate, but it’s how investors seem to be working. That means a Series C (or even D) company can still show a lot of Series A characteristics as they dive into a new market. Typically, this’ll happen when there’s a massive revenue driver—shifting to enterprise sales, for example, entering a new geographic market, and so forth.

What’s it like to work here? A more stable environment. There’s more job security and stability compared to earlier stages. There’s more career growth, with opportunities for advancement and professional development. Finally, there’s usually money for more competitive compensation, where salaries and benefits become more competitive with established companies—although equity may become less compelling as the risks of the company go down.

But, you can still expect a lot of the chaos and shifting of a Series A company if this later-stage company is still trying to actively open major new markets. Just be prepared for that—a company can be many things at once, just like people.

Note that this stage can continue… a while. Stage C. Stage D. Stage E. That’s because the hurdle from this “late stage” phase to “pre-IPO” is huge. Promising companies can continue to get funding to build toward it, provided they’re showing strong trends in the right directions. But at each additional round of funding, you should start to see the “late stage” characteristics I’ve described getting firmer, and start to see the “pre-IPO” characteristics begin to emerge.

Late Stage / Pre-IPO

You get here when you’ve started to establish market dominance, solidifying your market position and maximizing growth. You’ve developed operational maturity, with highly efficient operations and well-defined business processes. Finally, you’re in IPO Preparation More, preparing for a public offering or acquisition, with a focus on compliance and governance.

As an employee, you’ll encounter a more structured organization, with clear hierarchies and established corporate culture. You should have comprehensive benefits and compensation packages. And finally, the equity kicks in with exit opportunities: and the potential for significant financial gains through stock options or shares.

And…

This is an excellent article about standard startup behaviors that nobody tells you to expect.