I think one thing that is happening here is that certain types of startups are throwing money at problems that need to be solved in order to grow enough that raising additional funds is easy and/or not required.
An example would be that the founding team isn't skilled enough to get through the product market fit stage, so they hire in order to fill those gaps. Or maybe it's a chicken & egg problem, which often requires lots of time and luck to crack.
With the high salary requirements that engineers and designers have today, especially in Silicon Valley, this means burn-rates get very high very fast, even with only a few employees.
I remember five years ago in most cases you'd take a major salary cut (which was made up for in equity) when joining a startup as a first hire. You took a big risk to be employee number one or two. These days the landscape is so competitive you not only get equity, but a great salary as well.
I wonder if this has something to do with what you're hinting at?
An example would be that the founding team isn't skilled enough to get through the product market fit stage, so they hire in order to fill those gaps. Or maybe it's a chicken & egg problem, which often requires lots of time and luck to crack.
With the high salary requirements that engineers and designers have today, especially in Silicon Valley, this means burn-rates get very high very fast, even with only a few employees.
I remember five years ago in most cases you'd take a major salary cut (which was made up for in equity) when joining a startup as a first hire. You took a big risk to be employee number one or two. These days the landscape is so competitive you not only get equity, but a great salary as well.
I wonder if this has something to do with what you're hinting at?