The Pragmatic Engineer The state of VC within software and AI startups – with Peter Walker
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Aug 6, 2025 
Peter Walker, Head of Insights at Carta, dives into the evolving world of venture capital and startups. He shares insights on why funding is falling despite record investments and the increasing trend of solo founders versus teams. The conversation explores key metrics like ARR per FTE and how hiring practices have shifted significantly. Walker also unpacks bridge and down rounds, offering advice for engineers on what to consider before joining a startup and interpreting current valuation trends. This is essential listening for anyone navigating the startup landscape today.
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Uber’s Growth-at-All-Costs Anecdote
- At Uber, the company sacrificed profit on every ride to fuel growth, accepting losing $2 per ride during rapid expansion.
- This strategy felt irrational but ultimately contributed to Uber’s success.
Startups Hiring Decline & AI Impact
- Startups are hiring fewer people each year, dropping from 73,000 hires in January 2022 to an estimated 20,000 in January 2025.
- AI boosts engineer productivity, enabling smaller teams to achieve more without increasing headcount.
Fewer Companies Raise VC Funding
- Despite record VC investment levels, the number of companies raising funding has been halved since 2021.
- Founders increasingly consider alternatives like bootstrapping, moving away from venture capital as the default.
