---
title: "A Funny Thing Happened on the Way to Sand Hill Road"
description: "Explore how Series A startup funding evolved from runway-focused to dilution-based as VC grew 40x, with median headcount doubling from 15 to 28 since 2010."
categories: ["fundraising","SaaS","startups"]
keywords: ["Theory Ventures","Tomasz Tunguz","venture capital","Series A funding","startup runway","capital scarcity","dilution-based financing","SaaS funding"]
ai_summary: "This post explores the shift in Series A funding from runway-focused to dilution-based financing amid changing venture capital dynamics."
date: 2022-12-14
lastmod: 2026-07-28
canonical_url: https://www.tomtunguz.com/series-a-headcount-runway-years/
author: "Tomasz Tunguz"
---

A funny thing happened along the way to Sand Hill Road in the last decade : startups stopped talking about how much runway a Series A would buy them. 



In the 2000s, when capital was scarcer, founders & VCs would derive round size by debating the quantum of money required to achieve Series B milestones. 

When capital is scarce, it's rationed.

In the 2010s, US venture capital grew 40x in 10 years. More capital meant the constraints of yester-decade no longer applied. Founders declared a maximum acceptable dilution instead.

Round sizes ballooned. So, did headcount at the Series A. In 11 years, the median headcount at Series A swelled from 15 to 28. [1]


![image](https://res.cloudinary.com/dzawgnnlr/image/upload/g91qjff2qsckdx2ftbwm.png)

As the pendulum swings to a higher-cost-of-capital-environment, milestone-based financing may return. Let me explain :

| Era | Median Employees at A | Median Salary | Median Round | Runway in Months| 
| --- | ---: | ---: | ---:| ---:| 
| 2010 | 15 | 150k | 3.2 | 17 | 
| 2021 | 28 | 200k | 16.1 | 35 | 
| 2021 | 28 | 200k | 7.8 | 17 | 

In 2010, the median software Series A startup raised $3.2m & employed 15 people at about $150k average cost. Series A dollars provided the business 17 months' of runway at constant burn assuming no revenue. 

In 2021, employment costs per capital increased to roughly $200k. At 28 employees, a $16m Series A fueled the company for 35 months. That's a lot of buffer to achieve Series B metrics [1]. 

But we're no longer in 2021. Today, the public markets [value companies like it's 2017](https://tomtunguz.com/trends-in-multiples/). 

If the Series A market follows suit, the median series A will fall to $7.8m, which means a 28 person company will have 17 months' of runway - effectively identical to 2010 runway. 

Capital scarcity curtails startup operation. Team sizes will winnow to lengthen runway. Fewer person hours means less marketing, sales pitches, & bookings. Founders & VCs would debate how much capital is required to attain Series B milestones at higher salaries than a decade ago.

I doubt the pendulum will reach the touch the capital scarcity of 2010, if only because VCs have more than $200b in dry powder. 

But, I wouldn't be surprised if milestone-based financings re-emerge to justify round sizes again.

---
[1] Thank you to the [Pitchbook](https://pitchbook.com/) team for running the headcount analysis data. 
[2] Tangentially, this is why the burn multiple (total burned / total ARR) has become an important investor metric.