Nail the first hires
- Joanne Chen posted that 78% of Foundation Capital seed companies raised Series A when they got their first hires right. - She contrasted that success rate with industry averages between 15% and 40%, highlighting early culture and hire quality. - The statistic frames the first hires as a critical early determinant of later fundraising outcomes (x.com).
A Foundation Capital partner says the firms in its seed portfolio that “got their first hires right” reached Series A at a 78% clip, far above recent market benchmarks. (foundationcapital.com) (carta.com) Joanne Chen, a general partner at Foundation Capital since 2014, posted the figure on X and tied it to the quality of a startup’s earliest employees and the culture those hires set. Foundation describes its work with founders as starting “from the earliest stage,” including recruiting and company-building. (foundationcapital.com 1) (foundationcapital.com 2) (x.com) Series A is the first large institutional financing round after seed, and it has become harder to reach in the current venture market. Carta reported that 30.6% of companies that raised a seed round in the first quarter of 2018 made it to Series A within two years, versus 15.4% for the first-quarter 2022 cohort. (carta.com) That gap puts Chen’s 78% figure in context: it sits well above the roughly 15% to 40% range often cited for seed-to-Series A conversion, depending on cohort, timing window, and dataset. Investor Connect lists 40% as a stage-to-stage benchmark, while Carta’s more recent cohort data shows the two-year rate in the mid-teens. (investorconnect.org) (carta.com) The hiring claim lands in a market where seed companies are taking longer to raise the next round and are relying more on bridge financing. Carta said about 40% of all venture rounds raised by seed-stage companies in 2024 were bridge rounds, up from 36% in 2023. (carta.com) Seed pricing has also stayed high even as deal counts have thinned, which raises the bar on execution after the first check. Carta said the median pre-money valuation for seed rounds reached $16 million in the fourth quarter of 2024, the highest quarterly figure in its dataset going back to at least 2016. (carta.com) Foundation Capital has been emphasizing hands-on help with recruiting, customers, and fundraising in its own materials, so Chen’s post also doubles as a statement about what early-stage investors say they can influence. The firm says it works with founders on “recruiting, closing first customers, refining pitches, and solving the problems that can’t wait for quarterly board meetings.” (foundationcapital.com) The number itself is firm-specific, not an industry census, and Chen did not publish the underlying sample size or methodology in the source provided. But in a seed market where recent cohorts have struggled to clear the Series A bar, the argument is straightforward: the first few people on payroll can shape whether a startup ever gets to the next round. (x.com) (carta.com)
