I haven't been in that situation in terms of being in a high-burn rate, VC-funded startup, but I think the transparency can work if it is consistent. Of course

I haven't been in that situation in terms of being in a high-burn rate, VC-funded startup, but I think the transparency can work if it is consistent. Of course, if our company tells us nothing about its finances and then suddenly the news leaks that there is only 3 months of runway left, then we'll be likely to want to leave. Not only can the company not keep its financial promises, it can't even give us ample notice about it! On the other hand, if we are aware of our company's financial situation from day one, then approaching the end of the runway is much more gradual rather than sudden, and also this news comes as part of a whole pattern of honesty and openness by the company. Within this context, I see it is entirely plausible that the openness builds loyalty. Sure, some people will say "I can't afford the risk of being unemployed for even a week right now, so I'm going to have to get my ducks in a row to be able to find another job promptly, and I may have to leave before the next round", but they will tell the company that (so it can plan around those departures) and they will try to arrange things not to screw over the company. And what's the alternative? Lie to those people who are working hard for you, and risk them screwing up their life if you don't manage to close the next round? What kind of broken human does that to their colleagues as a matter of conscious, systematic decision?