Great Retirement, Meet the Great Reload

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Welcome to Startups Weekly, a fresh look at this week’s startup news and trends. To receive this in your mailbox, subscribe here.

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The Great Retirement, the economic trend of people leaving their jobs in pursuit of other opportunities, was met with a harsh reality: The Great Reset.

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This week, a number of tech companies, mostly those valued at more than $1 billion from their venture capital investors, have announced they are cutting their workforce. I wrote three quit stories in less than 24 hours, the pace I haven’t experienced since the start of the pandemic. These stories may have the same leaders, but they are completely different.

Unlike before, when startups were forced to lay off employees in response to the sudden shock of the pandemic, today’s technology companies are laying off employees – to a greater or lesser extent – due to their own indiscipline. I have more sympathy for the founder who was caught off guard by the pandemic than for the one who overspent despite knowing the boom wouldn’t last forever and is now laying off the same employees who helped it take off. Whiplash, as I hear from some former employees, is putting it mildly.

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Growth is hard, and part of a founder’s job is to find a way to scale, but we also need to remember that change was inevitable. Especially for startups that enter the product market during a once-in-a-lifetime event.

The biggest difference between layoffs in 2020 and layoffs in 2022 is money, which could potentially be a lifeline. Startups have raised huge amounts of capital thanks to larger average deal sizes over the past two years; this means that some of the capital that was once used to sweeten benefits or candidate proposals could be diverted to the runway. Jason Lemkin, Head of SaaStr put it well on twitter: “Many startups have also been lucky and have been at the bank for years due to the covid rounds…capital they wouldn’t have otherwise.”

If you are a founder, now is the time to wean yourself off those lavish spending and focus on keeping what you have. For staff: let me know which spreadsheets I need to retweet. To find out more, read summary of all tech layoffs last weekand then head over to TechCrunch+ for some tips on how to navigate the market.

In the rest of the newsletter, we talk about venture capital firms’ spicy twists, fintech drama, and the inclusive game duo in exclusive worlds. As always, you can support me by forwarding this newsletter to a friend or follow me on twitter or My blog.

Which venture firms are attracting despite the payoff

This week, a number of venture capital firms have announced new funding or new strategies. In Afore’s case, it’s both. The pre-seed firm tells TechCrunch that they have closed the $150 million fund and introduced their own accelerator of sorts with a standard deal. Going forward, any recognized company will receive $1 million at a post-buyout valuation of $10 million. It’s a not-so-slim copy of Y Combinator and a way for Afore to stand out in a changing market.

Here’s why it’s important: Afore isn’t the only firm to change its mind. Backstage Capital told me this week that after investing in 200 companies, he will now only perform follow-up checks on his existing portfolio. For now, that means no net new Backstage companies, even as the firm builds up assets under management.

In addition, we hear that New $485M Unusual Ventures Fund comes with an impressive promise of full time assistance. Founders at an early stage, this is definitely a stressful time to be in place, but also a key one.

Digital rendering of an abstract multicolored curve diagram on a gray background to represent sound waves.

Image credits: Andrey Onufrienko (Opens in a new window) / Getty Images

Stripe plays checkers with Plaid

This week at Equity, your favorite trio chatted about the Stripe and Plaid drama. for the background, Stripe recently announced a new product this would give customers the ability to directly connect to their customers’ bank accounts, access financial data, and manage transactions. AKA, exactly what Plaid does.

Here’s why it’s important: Plaid CEO and co-founder Zach Perret tarnished Stripe in a tweet, suggesting that the company may have used its previous relationship with Plaid to gain a competitive edge. We talked about fintech intersecting and competing with each other for months on the podcast, but this struck me as the most extreme example of the tension. Listen to the podcast to see our entire take – and why this might be a useful data point for founders.

Seamless spy eyes abstract background pattern

Image credits: Filo/Getty Images

Let’s be exceptionally inclusive

For a deal of the week that may have passed you by, I have two! Walnut and Line are two startups bringing inclusive gaming to exclusive industries. The Walnut Company, which this week announced its $110 million Series A giveaway, built a “buy now, pay later” product for healthcare billsand Line, which received US$25 million in funding, wants to provide low-income people with an easier way to access cash in emergencies.

Here’s why it’s important: These startups, if they succeed, will highlight the promise of a technology that breaks down barriers for the disenfranchised in our institutions. This is why I choose fintech in terms of wealth, access and education as my new direction.

Digitally generated image of an abstract multicolor curve chart on a white background.

Digitally generated image of an abstract multicolor curve chart on a white background.

In a week

Seen on TechCrunch
Digital Health Startups Prepare for the Post-Roe World

Your MVP is neither minimal nor viable nor a product

As the Rowe v. Wade decision approaches, should you delete your period tracker app?

Peloton reportedly looking to sell up to 20% stake amid struggle

Seen on TechCrunch+

Deal with falling UiPath costs

Psychedelic startups are on a long journey to consumer markets, but these 5 venture capitalists are taking over

Hiring the best startups on a budget during the Great Retirement

See you later,

H




Credit: techcrunch.com /

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