State of
Startups

2019

2016
2017
2018

Welcome to the fifth edition of State of Startups. What started as an experiment in 2015 has since become a treasured tradition here at First Round. It's now the industry's largest dataset on what it’s like to run a startup with 3,600+ submissions and 190,000+ data points.

The startup world has undergone seismic shifts since we first launched our survey — from the ebb and flow of market trends to important and evolving conversations around topics such as diversity and inclusion, sexual harassment, company culture and the role of tech in society.

To reflect these changes, this year we expanded the scope of our survey to cover not just founders but startup employees as well. Where do the founder and employee perspectives diverge and align? Where are leaders making progress — and where are founders falling short? With 950 total submissions, it’s our most detailed look yet into the challenges of operating a startup, plus new perspectives on the truth behind Glassdoor reviews, compensation packages, remote work and more.

Our hope is that this mix of mainstay questions, fresh inquiries and added perspectives presents an even sharper understanding of what company builders think, feel, fear and value as we head into 2020. With that, here are the trends and insights that stood out as important or counterintuitive:

1

Founders fear the bubble — concerns are at a 4-year high.

This year, over two-thirds of founders who ventured a guess think we are in a bubble for technology companies. It’s the highest number we’ve seen since 2015 — up 12% from 2018 and 25% from 2017.

2

Founders anticipate rockier fundraising roads in 2020.

In our 2018 survey, founders were optimistic about the year to come. Only 44% believed it would get harder to raise venture capital and only 46% believed investors would regain the upper hand.

Predictions were gloomier from this year's respondents. 65% of founders believe capital will be harder to raise in 2020, and 70% predict the balance of power will shift towards investors.

3

Gender bias in hiring is bad, and in fundraising it's worse.

40% of female employees reported that their gender hurt their chances of getting hired or landing senior roles in tech.

If you're a founder, the deck is even more stacked against you: 70% of female founders felt their gender hurt their ability to fundraise.

4

Not prioritizing diversity? Employees will show themselves out.

80% of founders believe having a more diverse team will have a direct positive impact on the value of their startup.

And for employees it’s becoming non-optional. Those who believe their leadership isn't prioritizing diversity and inclusion are 3x as likely to anticipate leaving their company within the next year (34% vs. 11%).

5

Half of founders don’t trust Glassdoor reviews — but employees do.

When asked about their company's reviews on sites like Glassdoor, only 53% of founders described them as accurate. Employees were far more likely to agree with what they read — 80% of them felt their company's reviews were a true reflection.

6

Compensation carries less weight than you might expect.

Only 1 in 10 employees said cash or equity compensation was a primary reason they joined their company, and only 1 in 20 founders said equity played a starring role in their pitches to candidates.

Much higher on the employee wish list? Their ability to make an impact (55%), the problems they’d be solving (42%), the mission (40%), the team (39%) and the culture (30%).

7

Founders question the upside of working from home, but employees are on board.

Only 15% of founders were ready to stake a claim that working remotely makes their team more productive. But employees are big fans — they were nearly 3x more likely (41.4%) to say that working from home gave them a productivity boost.

That said, founders who even occasionally work remotely are 6x more likely to have a positive view of their employees doing the same.

8

Not to pile on, but CEOs really should feel the pressure.

When employees lack faith in their CEO, they are 3x less confident that their company will see a $1B+ exit, 5x more likely to leave within a year, 6x more likely not to exercise their options, and 2x more likely to think the company will fail due to culture or team.

Of note, only 25% of CEOs surveyed are currently working with executive coaches.

9

Mental health matters — but there's a gap in who's accessing it.

When we asked founders about which specialists they see regularly, female founders were nearly 3x more likely to report enlisting a therapist or psychiatrist compared to their male counterparts (42% vs. 15%). We observed a similar divide comparing founders under and over the age of 40 (28% vs. 16%).

10

Community is the new moat.

Nearly 80% of founders reported building a community of users as important to their business, with 28% describing it as their moat and critical to their success. You can read more about building your own thriving community here.

Bonus content:

Get access to a special unpublished list of resources.

We asked survey participants for the top newsletter, podcast, or article they’d recommend to a friend founding or joining a startup — and we've compiled an amazing list of "must reads." Get the list by entering your email address below. (We'll also add you to the First Round Review newsletter if you're not already a subscriber).

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Complete Survey Results

See the results from all 950 survey respondents below. In addition to breaking them out by category, we've also given the the option to toggle between the employee and founder results. While many questions were posed to both founders and employees, some were designed just for one group to weigh in.

Hot Trends and Hot Takes

Is now a good time to be starting a company?

Employees
Founders

Are we in a bubble for technology companies?

Employees
Founders

Over the next year, do you think power will be more in the hands of entrepreneurs or investors?

Employees
Founders

Over the past year, do you think power has generally been in the hands of entrepreneurs or investors?

Employees
Founders

Should the government break up companies like Facebook and Google?

Employees
Founders

Which of the following startup trends are most overhyped? (Pick 3)

Employees
Founders

Which of the following startup trends are most underhyped? (Pick 3)

Employees
Founders

Fundraising and Exits

If you intend to go public, how long do you think it will be until you IPO?

Employees
Founders

Do you expect it to get harder or easier to raise venture capital in the next 12 months?

Employees
Founders

How challenging do you think it will be to raise your next round of capital?

Employees
Founders

Compared to today, over the next year...

Employees
Founders

What are the most important criteria in picking your lead investor? (pick up to 3)

Employees
Founders

How much time do employees have to exercise their options after leaving the company?

Employees
Founders

If you've gone through an incubator or accelerator program, would you recommend it to a fellow founder?

Employees
Founders

Team Building

Do you think your company's reviews are accurate on sites like Glassdoor, Comparably, and Indeed?

Employees
Founders

Is it easier or harder to recruit talent this year than last year?

Employees
Founders

How many people do you think you're going to hire in the next 12 months?

Employees
Founders

Have you done a RIF (layoff) in the last year?

Employees
Founders

What is the hardest executive hire you've made?

Employees
Founders

What do you believe are the top selling points for a candidate to join your startup? (pick up to 3)

Employees
Founders

Company Building

Did you hit last quarter's revenue target?

Employees
Founders

Are you optimizing for growth or profitability?

Employees
Founders

How many years until you think you'll be profitable?

Employees
Founders

If your startup is not successful, why do you think that will be?

Employees
Founders

To what extent is building a community of users important to the success of your business?

Employees
Founders

Leadership

How strong do you think your leadership team is?

Employees
Founders

As a founder, if you could clear your schedule to work on just one company priority, it would be:

Employees
Founders

Do the political beliefs of your leadership team matter to you?

Employees
Founders

Work Habits

How would you describe where your team works?

Employees
Founders

On average, how many hours do you work a week?

Employees
Founders

On average, how many hours a week do your team members work?

Employees
Founders

On average, how many days a week do you work remotely?

Employees
Founders

When your team members work from outside the office they are generally:

Employees
Founders

On average, how many hours of sleep do you get a night?

Employees
Founders

Diversity, Inclusion & Belonging

What is the gender representation of your founding team?

Employees
Founders

What is the gender representation of your board?

Employees
Founders

Do you think having a more diverse team will have a direct positive impact on the value of your startup?

Employees
Founders

Do you believe tech companies are inclusive places to work for caregivers (caring for either children or adults)?

Employees
Founders

Does your organization have a strategy to promote diversity and inclusion?

Employees
Founders

Have you or has someone you know personally experienced sexual harassment in the workplace?

Employees
Founders

In tech, age discrimination starts at the following age:

Employees
Founders

My company has the following in place (select all that apply):

Employees
Founders

About the Respondents

How old are you?

Employees
Founders

What is your gender?

Employees
Founders

How many founders does your company have?

Employees
Founders

Which of these specialists do you see regularly?

Employees
Founders

About the Companies

Where is your company headquartered?

Employees
Founders

What was your last funding round?

Employees
Founders

How many full time employees currently work at your startup?

Employees
Founders

Which sector best describes your startup?

Employees
Founders

How long ago did you start your company?

Employees
Founders

How long ago did you raise your last round?

Employees
Founders

Have you gone through an incubator or accelerator program?

Employees
Founders

Hot Trends and Hot Takes

Should the government break up companies like Facebook and Google?

Employees
Founders

Which of the following startup trends are most overhyped? (Pick 3)

Employees
Founders

Which of the following startup trends are most underhyped? (Pick 3)

Employees
Founders

Fundraising and Exits

If you intend to go public, how long do you think it will be until you IPO?

Employees
Founders

How confident are you that your startup will exit for over a billion dollars?

Employees
Founders

Do you plan on exercising your options?

Employees
Founders

Team Building

Do you think your company's reviews are accurate on sites like Glassdoor, Comparably, and Indeed?

Employees
Founders

What are the top reasons you joined your startup? (pick up to 3)

Employees
Founders

How much longer do you think you'll stay at your current startup?

Employees
Founders

Company Building

If your startup is not successful, why do you think that will be?

Employees
Founders

Leadership

Do you consider your company well run?

Employees
Founders

Do you believe in your CEO?

Employees
Founders

If you could ask your founders or CEO to clear their schedule to work on just one company priority, it would be:

Employees
Founders

Work Habits

On average, how many hours a week do you work?

Employees
Founders

On average, how many days a week do you work remotely?

Employees
Founders

When working remotely, I am:

Employees
Founders

On average, how many hours of sleep do you get a night?

Employees
Founders

Diversity, Inclusion & Belonging

Do you believe tech companies are inclusive places to work for parents?

Employees
Founders

Do you believe your company's leadership is prioritizing diversity & inclusion?

Employees
Founders

Does at least one of your founders identify as female or non-binary?

Employees
Founders

Have you or has someone you know personally experienced sexual harassment in the workplace?

Employees
Founders

In tech, age discrimination starts at the following age:

Employees
Founders

My company has the following in place (select all that apply):

Employees
Founders

About the Respondents

How old are you?

Employees
Founders

What is your gender?

Employees
Founders

Which functional area best describes your role?

Employees
Founders

Do you think your next job will be at a startup?

Employees
Founders

Which of these specialists do you see regularly?

Employees
Founders

About the Companies

Where is your company headquartered?

Employees
Founders

What was your last funding round?

Employees
Founders

How many full time employees currently work at your startup?

Employees
Founders

Which sector best describes your startup?

Employees
Founders
Select a category

Thanks

A team of phenomenal people made this year's State of Startups possible. Many thanks to Jomor Design and Chris Gaffey for building this beautiful site. And of course, we're grateful to the hundreds of startup builders who took the time to share their perspectives so that we could create an accurate snapshot of startup life in 2019. You're the best.