I'm not usually one for soapbox moments, but this matters. The future of innovation depends on new ideas from new players, not just whatever suits a few giant corporations.
This post is an engineer’s guide (in plain English and a bit of math) to the startup metrics that VCs and founders obsess over. We’ll cover the essentials: how fast you’re growing, whether users stick around, how long your cash will last, and if your business model makes any money. By the end, you’ll see why 100 delighted daily users beat 1000 drive-by signups, and why these metrics have become my new “performance specs” in evaluating startups.
I recently found myself this close to trading in my role at the firm for an early seat on a shiny pre-Series A Sequoia-backed AI startup in the consumer space. The opportunity seemed like a rocketship - exciting tech, star investors, that intoxicating “get in on the ground floor” energy. Why on earth would I hesitate? Well, spoiler alert: I didn’t go through with it. In this post, I’ll candidly share why I nearly jumped - and the reality check that made me pump the brakes.
I'd say brand awareness and being the default entry point to information is probably their strongest "moat" for search. I'd argue that this moat is being eroded in the form of competition from ChatGPT, Claude, Perplexity. Their primary revenue generator (Ads supported search) is being chipped away at by competition and they've had to pivot (LLM based search) to keep up.
I agree, unique data assets allow them to stay ahead of the competition. They are in a much more tenuous position these days though.
For new entrants in these markets, the distance between idea and implementation is getting smaller and smaller at the same time that the big players are doing more land grabs. It's quite an interesting dynamic!
We’re in an era where spinning up a new app is easier than ever. With AI-assisted coding, no-code tools, and cloud infra, the barriers are down. If your moat is “we write complex code,” there’s an AI and ten hungry devs who can match you by next Friday.
The only real constant is motion. In 2025, software moats are not ditches. They’re treadmills. Keep running.
It doesn’t come from being early to a trend. It comes from going deep where others are shallow.
Look for the boring edge cases.
Listen for the expensive mistakes.
And build tools that compound - not just scale.
> I wouldn't expect a small VC company to have that may engineers let alone an engineering culture, if they didn't they better be paying you hundreds of thousands to define one, especially since I'm assuming that you seem to be engineer #1.
Yep, I'm the only full-time eng. Base salary is significantly lower than Big Tech, If carry compensation pans out, total comp is significantly higher. Write about this in a previous post: https://www.swe2vc.com/p/compensation-comparison
> This looks like a serious red flag, are the other people (early founders and partners) also in the trenches doing this with you?
The partners and founders work all the time too. They just have support structures and lives that allow them to be singularly focused on work. I had a more balanced life before starting this job.
I don't think hustle culture alone is enough if there are no results in personal growth, mission, or economic growth. One of these factors must be exceptional to justify the unbalanced life required to do well in this industry.
As a pure SWE, the code / systems that you work on are not at all as technically nuanced or challenging as what you'd get at a startup or big tech co. Your ability to go deep technically is sacrificed for an emphasis on speed and functionality. The focus required to do anything else is impossible in such a dynamic (volatile) environment.
As a more entrepreneurial engineer, you will get to grow horizontally (https://alexkondov.com/the-t-shaped-engineer). You'll drive product decisions, have more agency on direction, and get to interface with customers/users. You'll also have to get really good at saying "No" and stakeholder management.
On the mission side, a good amount of VCs claim to be making the world a better place somehow. I'm not convinced the secondary impact of money / company support they provide is moving the needle significantly here. You can have more mission alignment at a startup.
Financially, big tech is probably the best risk adjusted investment of your time. Startups have better outlier results, but are riskier. VC is somewhere in the middle if you get carry and the firm performs well.
This kind of work really favors work life integration. If work is your top priority, and you can put in absurd hours / shirk other responsibilities, this type of job might be for you.
If you don't think your current startup will scale and achieve escape velocity, and you don't see a path to that or have the energy to take it there, it's time to move on.
Thinking about the long game, if you want to raise VC funds again, your reputation might be better served by winding down and returning the funds you haven't used, instead of burning through the remaining 7M.
If your team is still energized and believes, it might be better for the company for you to move on. You could explore an advisory or board only role and help identify a new leader to take the reigns.
I 100% agree with this. Big tech jobs, or those at medium sized firms, are easy to coast in. I've heard that at some FAANG companies Senior SWE can be viewed as a terminal level and it's totally acceptable to have a flat career trajectory here. Consistent, stable, and reliable salary with an average amount of work sounds good to me, you just need to have a high tolerance for BS.
I'm not sure we can solely blame VC incentives here. There are many edtech companies that are doing well with VC funding / incentives (Coursera, Duolingo, Goalsetter to name a few). As far as I know, the majority of these companies have not resorted to predatory practices or actively misleading potential students.
I agree that VCs have an incentive to inject high-octane fuel into the growth engine of a company, but the decision to use that fuel for an ICBM or a Spaceship is ultimately that of the founders.