Survey: for first time more founders say sales leaders, not engineers, are hardest to hire; 53% say investors have more sway in deals, compared to 39% in 2016
Every year, we survey as many venture-backed startup founders as possible to figure out what it's like to run a technology company right now.
Context & Ripple Effects
First Round's annual founder survey has been tracking a steady transfer of leverage toward capital: its predecessor found 67% of founders already said VCs held more negotiating power last year, alongside 31% who no longer intended to IPO at all. That sits against hard exit math — an analysis of S1 filings showing median founder ownership at exit of just 11% versus 62% for VCs.
The new wrinkle this year is on the hiring side: for the first time, founders name sales leadership, not engineering, as their hardest role to fill — a signal that the bottleneck for venture-backed companies is moving from building product to selling it, even as investor sway in deals climbs to 53% from 39%.
First-order effects
- Founders competing for go-to-market executives now bid against each other for a scarcer talent pool, while the same founders report investors gaining deal leverage — 53% versus 39% a year earlier — squeezing them from both sides.
- VCs enter term negotiations with measurably more perceived power than in the prior cycle, compounding the negotiating-power majority already recorded in the 2016 survey.
Second-order effects
- Compensation packages for sales leaders should inflate as startups bid up a limited pool, redirecting equity and cash that would otherwise fund engineering headcount.
- Founders accepting heavier investor influence may concede more aggressive terms, deepening the ownership gap documented in the exit-filings study rather than narrowing it.
Third-order effects
- If the pattern holds across subsequent survey years, venture-backed company-building structurally reweights toward go-to-market execution as the scarce capability, with capital providers holding durable pricing power over terms.
- A persistent investor-leverage trend points toward founders entering deals with weaker positions by default, making survey data like First Round's a recurring benchmark for how the founder-investor balance shifts cycle to cycle.
The trend: Venture-backed startups are shifting from an engineering-talent bottleneck to a go-to-market one while investor leverage over deal terms climbs year over year in annual founder surveys.