Venture capital has become a mechanism for extracting executives from trillion-dollar companies and paying them whatever it takes to build in an AI-native world.

We’re not funding companies anymore 鈥� we’re buying access to the few hundred people who’ve built AI systems inside , and .

was founded by (ex- chief scientist), (ex- AI lead), and (former researcher at OpenAI). The company operates with roughly 20 employees. So far, it鈥檚 raised $3 billion at a $32 billion valuation, without a product or any revenue. What they do have is three executives from trillion-dollar companies who understand how to build superintelligence. That alone commands $1 billion in capital per team member.

This has become the playbook.

agreed to pay to use its models and hire co-founder as CEO of Microsoft AI, along with most of Inflection’s 70-person team. CEO reportedly offered up to over six years. struck a nonexclusive licensing deal with and hired its CEO, co-founder and select R&D staff. Meanwhile, OpenAI CEO has publicly stated that Meta offered top OpenAI talent signing bonuses.

The traditional venture formula is inverting. It used to be simple: raise $20 million, spend 95% on growth and headcount, allocate 5% to executive comp. Now the majority of capital flows toward recruiting a handful of executives who understand how to operate in an AI-native environment.

But most founders can’t compete in $20 million bidding wars. And so there’s an asymmetric play, and it’s 10x cheaper.

Why executive judgment is the new scarce resource

In an agentic era, AI systems write code, process data, handle customer service and automate operations. The scarcest resource has become the judgment of executives who know how to orchestrate these systems effectively.

Think about what this means in practice. A decade ago, $100 million might have hired 200 engineers. Today, that same capital might fund five FAANG executives at $10 million each, with the remaining $50 million allocated to compute, AI tooling and a skeleton crew of 20 to 30 people overseeing autonomous agents.

Executives from frontier AI companies command massive premiums because they possess knowledge that doesn’t exist elsewhere. They navigate what’s possible with current AI capabilities, understand the economics of model training and inference costs, and can anticipate regulatory frameworks before they’re codified.

What this means for capital formation

This shift creates a new power dynamic. Founders who can attract marquee executives unlock fundraising rounds that would be impossible based on traction or revenue alone. VCs evaluate deals increasingly on “who’s building this” rather than traditional metrics like customer acquisition cost or gross margins.

The clearest signal: , with 19 employees, was acquired by for 鈥� $11.6 million per employee. In an agentic world, team size has become irrelevant.

How to compete with the asymmetric playbook

Most founders reading this can’t offer $10 million to $20 million equity packages to marquee executives.

But there’s a counterintuitive strategy emerging: Instead of competing directly for executives who’ve built AI systems at frontier labs, target the operators who’ve integrated them at scale inside Fortune 500s. A chief technology officer who deployed LLMs across 50,000 employees at or understands enterprise AI adoption patterns that most OpenAI researchers don’t.

Here’s the asymmetric approach we’re seeing work:

1. Hire the “translator” executives, not the “builder” executives. A former VP of engineering from who integrated AI into enterprise workflows is more valuable for a B2B AI startup than a research scientist from DeepMind. They’re 10x cheaper and often more relevant to your actual go-to-market challenges.

2. Offer board seats, not just equity. The most compelling pitch to executives earning $800,000 at FAANG companies isn’t just equity 鈥� it’s offering: (a) a board seat they’d never get at a big company; (b) meaningful ownership in a high-growth company; and (c) the chance to compress 10 years of career advancement into two to three years. The value proposition isn’t “get rich” 鈥� it’s autonomy, impact and an accelerated path to becoming a recognized operator in AI.

3. Build technical credibility through advisory networks, not executive hires. Instead of hiring one $5 million executive, allocate $500,000 across 10 advisers from Google, Meta and Microsoft who can provide technical validation during enterprise sales cycles.

4. Target executives in “golden handcuff” situations. The best candidates aren’t those getting $100 million offers 鈥� they’re the overlooked VPs at trillion-dollar companies who’ve built AI systems but are stuck behind org politics. They have the expertise, they’re ready to leave, and they’ll join for $2 million or $3 million equity packages if you can articulate a clear path to relevance.

The companies winning without massive war chests aren’t trying to out-recruit Anthropic for research talent. They’re targeting enterprise operators who understand how AI systems actually get deployed at scale 鈥� and building credibility networks instead of expensive org charts.

The real tradeoff

We’re witnessing the formation of a technical aristocracy. A few thousand individuals now command compensation packages previously reserved for successful founders, as wealth transfers from broad-based tech employment to an elite operator class. Venture capital has fundamentally transformed from a growth capital fund into a talent acquisition fund.

The AI gold rush will eventually end, but the economic structure it’s creating is permanent. In the agentic era, you don’t raise capital to hire engineers 鈥� you raise it to hire executives who know how to orchestrate AI agents that do the actual work.

The question isn’t whether the rules have changed. They have. The question is which version of the new game you’re playing: competing for $20 million executives from frontier AI labs, or building asymmetrically with $2 million enterprise operators and credibility networks. Both paths work. Only one is accessible to most founders.

is founder and CEO of , which eliminates the security review bottleneck that stalls enterprise deals for companies such as , and . Born in rural Nepal, he built a profitable company with a 24/7 security operations command center in Kathmandu, proving that world-class execution doesn’t require Silicon Valley overhead. He writes about capital formation and the economics of AI-era operations.

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As of mid-September, HR software startups globally have raised a collective $1.9 billion, per 附近上门 鈥� just under the $2 billion raised by such startups in all of 2024. U.S.-based human resources software startups have raised a combined $1.2 billion, up from the $1.1 billion raised in all of 2024.

It鈥檚 important to note that while funding may be on an uptick this year, investment is still among the lowest it鈥檚 been in several years. The $2 billion raised in 2024 was not only far less than the $10.5 billion peak in 2021 鈥� when startup investment overall was inflated 鈥� but also lower than all the years prior since 2018.

Fewer, bigger deals

Notably, deal count in 2025 is proportionally lower, both globally and in the U.S, signaling larger round sizes for HR-related startups.

The dollar total raised so far this year was across 236 deals. That compares to $2 billion across 419 deals in all of 2024. In the U.S., the total raised was across 95 deals, versus $1.1 billion raised across 168 transactions all of last year.

Indeed, a few huge deals have taken place in 2025. San Francisco-based HR tech startup in May raised at a $16.8 billion valuation. At that time, the 9-year-old company also announced it was conducting a $200 million tender offer to provide current and former employees with some liquidity. Its backers include ,,,, 1听补苍诲 , among others.

Also in May, Utah-based secured $165 million in , propelling it to unicorn status. Investors include , and . The 14-year-old company has built an employee recognition software and rewards platform.

In July, , a 7-year-old San Francisco-based startup that has built an 鈥渁ll-in-one鈥� AI-powered platform designed to help businesses more efficiently manage the recruitment process, announced a $50 million Series D.

Ashby told 附近上门 News that it more than doubled its customer base over the past year 鈥� from about 1,300 to more than 2,700 鈥� and saw its ARR jump by 135%. Those customers are a high-profile bunch, including the likes of startups , , , and , as well as enterprises such as and .

As the workforce has become more global 鈥� especially since the COVID pandemic led to more remote and hybrid work 鈥� the competition for hiring and retaining employees has intensified. On top of that, managing an existing workforce is more complex than ever. It鈥檚 no surprise, then, that HR software has become the digital infrastructure to help companies become more competitive and manage all the complexities. Add to that the increased popularity and usage of artificial intelligence to automate business processes, and it鈥檚 no wonder more companies in the space are raising capital.

, general partner at and an Ashby investor, told 附近上门 News earlier this year: 鈥淭he world is entering a new infrastructure cycle. Every system that companies rely on 鈥� CRM, ERP, finance, security, and yes, hiring 鈥� is being rebuilt with AI at the core,鈥� he said.

M&A dealmaking ticks up too

M&A activity for HR-related startups has also been robust, mirroring an overall surge in mergers and acquisitions among venture-backed companies.

Earlier this week, HR software giant听听announced plans to听听, which describes itself as an AI company building the next generation of enterprise knowledge tools, for $1.1 billion.

Founded in 2016, Stockholm, Sweden-based Sana had raised nearly $140 million in funding, per 附近上门 , from investors such as ,,, and.

The deal announcement followed one a few weeks earlier from Workday, which said it also plans to acquire , an AI-powered hiring startup that helps employers capture and screen candidates, improve conversions and answer candidate questions. The 9-year-old Scottsdale, Arizona-based company had in funding, according to 附近上门, from investors including , , , and .

In April, , parent company of , and , it would buy , a provider of HR and benefits solutions for small and mid-market businesses.

And as more venture dollars continue to flow into the space, expect to see more M&A activity that follows.

Related 附近上门 query:

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• Exclusive: With OpenAI and Shopify As Customers, Ashby Raises $50M Series D For AI-Powered Talent Platform

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So she stopped applying. Instead, Ella tried something else. She built a market trends dashboard using and , automated competitor tracking with , and launched a curated newsletter using . Within three months, she had 2,000 subscribers and inbound interest from multiple companies 鈥� not because of her r茅sum茅, but because of the value she had already created.

Ella鈥檚 story is becoming increasingly common. AI can easily handle many junior-level tasks, but replacing young talent with AI is a strategic risk.

Here鈥檚 why.

No juniors, no leaders

Skipping junior hires today means starving your leadership pipeline tomorrow. AI doesn鈥檛 absorb company culture, doesn鈥檛 sit in customer calls, and doesn鈥檛 develop the judgment that comes from lived experience.

Talented juniors grow into operators who understand your business inside out. Without them, you鈥檒l eventually need to hire from the outside, at a premium, and often without the same level of context or loyalty. Investing in junior talent is investing in your future bench.

Juniors are closer to your future customers

Younger professionals live in the behavior patterns, platforms and consumption habits that are shaping the next generation of buyers. They’re immersed in emerging communities, cultural trends and digital movements.

Senior leadership, no matter how experienced, rarely has the same intuitive pulse. Eliminating juniors increases the risk of losing touch with where your market is actually headed.

You lose the full potential of AI itself

Ironically, it’s often younger employees who are best positioned to push AI forward. They tend to experiment more, adopt faster and find creative use cases beyond the obvious. When you eliminate them, you don鈥檛 just replace task execution, you eliminate the very people who could help you get more from AI than you ever expected. Overreliance on automation limits your company鈥檚 ability to innovate with the tools themselves.

A message to the Ellas: Create value, don鈥檛 wait for permission

If you’re early in your career and being overlooked, don鈥檛 wait for a job title to start contributing. Use your skills to build something useful and visible. Whether it鈥檚 a side project, research product or content platform, showing traction is far more powerful than a polished CV. Companies notice momentum, not intent. When you prove value upfront, the right roles will find you, and on better terms.

It is important to note this is not an 鈥渁nti-AI鈥� article. On the contrary, I strongly recommend all companies should adopt AI 鈥� not as a replacement for people, but rather as a power multiplier for the people you employ and for those you will hire.

is a strategic adviser to tech companies and investors, specializing in strategy, growth and M&A, a guest contributor to 附近上门 News, and a seasoned lecturer. Learn more about his advisory services, lectures and courses at . for further insights and discussions.

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Reductions in force, or RIFs, are often unavoidable and always painful. I鈥檝e been there. And judging by the latest data from the 附近上门 Tech Layoffs Tracker, RIFs are continuing at a steady pace.

This year, tech firms both large and small have announced layoffs. Even companies in industries with rapid growth, like artificial intelligence, are not immune, as we saw announce a 14% RIF in July.

As a leader, you can effectively manage RIFs if you develop a comprehensive strategy and apply the insights gained from the experience and perspectives of other leaders who have been through them.

During my stints as a senior executive and CEO in various banks, I had to shutter more than one business that wasn鈥檛 making strategic sense. As a founder, I had to lay off the majority of the team in a business that didn鈥檛 find its product-market fit.

In both cases, many of the team members were long-time colleagues and friends. It sucked.

If you are not currently facing a RIF, this is the perfect time to create a strategy for one and hope you will never need it. Regardless, it is still crucial to assess the factors and events that could necessitate such a response.

Let鈥檚 explore what those look like.

Factors influencing RIFs

RIFs can be caused by macro and micro factors, the fault of the leadership team, or truly be necessitated with no one to blame.

At the macro level, if you look at venture capital and private equity, limited partners have been vocal about reducing their funding commitments until they see some capital returned. Secondary stock sales are not giving them much comfort that their GPs鈥� valuations of their portfolio companies are realistic.

The upshot for founders: You may be unable to count on that next raise being as large or coming as quickly as you had planned.

At the individual company level, a RIF may be the best or only way to deal with a change in strategy and market positioning. It may also be the most sensible option to revamp an organization that is no longer streamlined for success. The unexpected loss of a key customer could leave leadership with no choice but to reduce headcount.

One positive aspect that we can draw from the most recent economic data is that the U.S. economy has held up better than many expected, despite or perhaps because of changes in trade policy, tax rules and beyond.

However, uncertainty still looms for the second half of 2025 and into 2026. Including a downsizing scenario in your planning makes strategic sense, no matter how optimistic the outlook generally.

Conducting RIFs with compassion and clear strategic objectives

Your main priority in conducting a RIF should be treating employees with compassion. While this might seem obvious, there have been many instances in recent years where this hasn鈥檛 been the case.

I see too many RIF announcements that provide only vague rationales. This may be what your lawyers advise, but it clouds the perception of 鈥淎re you really on top of the business?鈥�

Be as clear as you can about why this RIF had to happen and why now. To the extent you can afford severance and placement assistance, the positive impact on the remaining team may be as powerful as retention bonuses for key people. It will pay off in the recruiting marketplace.

Similarly, I have seen RIF plans that cut evenly across the company, without a strategic plan to reallocate resources to the best-performing teams, products and markets. Very often, this leads to a second, or even third, RIF within a year.

Let鈥檚 turn to the CEO and top team. Anyone with a shred of empathy will hate announcing and leading a RIF, no matter how justified. However, the remaining team needs leadership that is focused and sympathetic, yet calm and energized about the post-RIF opportunities.

By all means, turn to your peers who have been through this. Mentors and coaches can play a brief but pivotal role in providing guidance and serving as a neutral party to confide in.

Perhaps surprisingly, there is potential upside in downsizing. After a couple of personal repetitions and counseling of other CEOs, I came to realize that a RIF can create opportunities to promote and hire superior talent into new positions. In particular, if you are shrinking one product line or geography, you may be looking to reassign talent to existing teams that you鈥檙e able to keep.

Striking the right balance of empathy for those leaving and optimism toward those staying and joining is possible. Focus, conviction and empathy will get you there.

Mistakes to avoid along the way

I鈥檝e been in the business for decades and I鈥檝e learned some lessons. The first is that I wish I had developed both pessimistic contingency plans and optimistic business projections. Even a skeleton plan of how you will reduce burn rates, who stays and who goes, allows leadership to focus on execution and communication when they are most critical.

The next step is to keep your investors informed about this planning. This not only ensures that you look professional, but it also gives you the best chance to get their support when it鈥檚 no fun for them either.

On the topic of communication, I learned to keep the story short, candid and in your own voice. If it sounds like a committee or outside counsel wrote your message, you will lose authenticity when it really matters. Reiterate your right to win and your confidence that the RIF sets you up for success.

From a tactical perspective, conduct the RIF mid-week and hold a follow-up town hall on Friday. Letting people know they are being let go on a Wednesday gives them and HR some time to process before the weekend. Similarly, a town hall on Friday gives you the best shot at sending the remaining team into the weekend with the story you want to tell.

Anticipation, planning and clear communication. Done correctly, a RIF can galvanize and focus an organization.

is an organizational and strategy consultant who helps individual and corporate clients with executive coaching, team development, succession planning and strategy development. He has had leadership roles in large and small organizations: he ran the global financial services group at , was the CEO of , led 鈥檚 U.S. expansion program, and co-founded , a data analytics company. During the 2008-2009 economic crisis, McMahon was an adviser to the on the Troubled Asset Relief Program, and he has served on several nonprofit boards, including the , of New York, and the .

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In the fast-paced world of startups, a new strategic function is gaining momentum 鈥� the Founder鈥檚 Office. This powerful unit, which acts as a bridge between the founders and the rest of the organization, is becoming essential for rapid growth.

Companies such as , , , , , and have all embraced this function to better navigate the complexities of scaling.

This team acts as the extension of the founders鈥� brains, responsible for handling high-value tasks, unblocking bottlenecks and preserving the founders鈥� time for only the most important work.

With such limited capacity, founders must delegate tasks while also staying ruthlessly focused on the bigger picture 鈥� namely, vision, product and culture. This is where the Founder鈥檚 Office plays a critical role. It helps prevent the company鈥檚 strategic plan from dying in the gap between idea and implementation.

Here are four reasons why every high-growth startup needs a Founder鈥檚 Office.

It amplifies the founders鈥� impact while protecting their time

Most startups hire one chief of staff and call it a day. Now imagine having a team of strategic generalists with complementary skills, all keeping the founders focused on high-impact initiatives.

Startups move incredibly fast. As they scale, it becomes increasingly important for the founders to delegate appropriately. Every hour saved by the Founder鈥檚 Office can be reinvested into fundraising, hiring, vision-setting or nurturing customer relationships.

The Founder鈥檚 Office must act as an extension of the founders, sitting at the core of decision-making. When crucial discussions arise about strategy, investments and company direction, the Founder鈥檚 Office can lean in, freeing up the founders to focus on what matters most.

It builds infrastructure that scales

Everyone hired in the Founder鈥檚 Office has a unique skill set and background. However, one underlying trait is operational rigor. Paired with the ability to create structure in a chaotic environment, this makes for a high-performing team.

This team creates and implements systems that keep the organization on track. As generalists working across multiple teams, they can step into any area of the business to identify bottlenecks and ensure nothing falls through the cracks.

The current Founder鈥檚 Office at my startup, , comprises three individuals, each aligned with one of three key areas 鈥� i.e. sales, operations, and growth. Each of them has very specific and tailored professional experience in their specialist area to ensure these projects have the best chance of success.

It creates a pipeline of future leaders

The Founder鈥檚 Office should be a dream team of operators with different levels of experience. Their role in this tight-knit unit primes them for future leadership.

These individuals are exposed to all aspects of the business and gain a deep understanding of it. This experience helps them grow into function leads, creating a strong internal talent pipeline of homegrown leaders who are aligned with the mission and culture.

At Abacum, for example, our head of product marketing and our head of growth both came from our Founder鈥檚 Office.

It improves visibility and accountability

As headcount grows, it becomes harder for founders to track performance as closely as they once did. This is compounded by shifting markets, new competitors and evolving priorities.

The Founders鈥� Office helps raise the bar across the organization while also keeping leadership in the loop. They monitor key metrics, track progress toward goals, and ensure execution happens on time.

This team oversees multiple strategic projects, holds a broad view of what鈥檚 happening across the business, and sees the bigger picture in a way few others can. They lead by example and hold themselves to high standards.

A high-growth startup鈥檚 success depends on speed, clarity and focus. A strong Founders鈥� Office delivers all three 鈥� making it not just a nice-to-have, but a strategic necessity for any company scaling with serious ambition. It鈥檚 the engine behind execution, the glue between teams, and the force that ensures the founder鈥檚 vision is translated into real, measurable progress.

is the co-founder and CEO of , a company specializing in financial planning and analysis software for mid-market firms. Abacum鈥檚 all-in-one platform enables CFOs to forecast revenue, plan headcount and account for unseen financial circumstances amidst tough macroeconomic headwinds. Under Mart铆nez鈥檚 leadership, the company has expanded internationally, with its headquarters in New York City, and offices in London and Barcelona. Before co-founding Abacum, Mart铆nez had a career in finance and technology. In 2018, he attended the at .

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