Dear founders, returning to the office is a numbers game
Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe here.
Toward the end of 2022, a number of entrepreneurs, some citing Elon Musk, told me that they’re bringing back an in-person work culture in the following year to help promote productivity and, in some cases, loyalty. One founder even told me over drinks and fancy snacks that they weren’t worried about losing talent — because those who leave just because there’s an in-person mandate weren’t truly mission-driven to begin with.
While some founders are clearly set on a return, others are confused. There’s the argument — sometimes coming from venture capitalists desperate to see portfolio companies succeed — that being in-person will help grow productivity, and eventually the bottom line. And there’s also the counterargument that remote work allows for more inclusive and expansive hiring, which could also help, well, the bottom line.
And if 2023 isn’t the year of the bottom line, I don’t know what else it could be. Kruze Consulting, an accounting firm for startups, mined through over 750 companies’ finances, which includes upward of $300 million in quarterly revenue and over $750 million in quarterly spend. I spoke to Healy Jones, who runs financial planning and analysis for Kruze Consulting, about his findings — and the results, he thinks, offer some balance to the debate.
To read more about his findings, read my TC column “Data hints at the value of startup offices.” In the rest of this newsletter, we’ll talk about noisy venture firms, Salesforce spinouts and Artifact. As always, you can follow me on Twitter or Instagram.
On paper, venture funding appears to be back. The flurry of new funds gives me and, more importantly, founders the vibe that VCs are back in business and ready to write lots and lots of checks. But one could argue that new VC fund announcement dates, much like the phrase “oversubscribed,” don’t mean much in practice.
Here’s why this is important: There are many reasons why all the dry powder isn’t as jumpy as we may hope. While new fund announcements are certainly exciting, the fund may already be partially invested through and investors need to make capital calls before writing those checks. The signal to watch is less around new money entering the venture space and more around, Why is this VC firm announcing their fund now, versus before, versus later? What’s the argument to show that you’re playing offense right now? I imagine it’s more complicated than “business as usual.”
- Tiger Global says India returns have ‘sucked historically’ but remain bullish
- Passthrough raises $10M to simplify the process of investor onboarding
- Losing the horn: VCs think majority of unicorns aren’t worth $1 billion anymore
Firsthand Alliance, led by solo investor Simon Chan, is a venture firm seeking to capitalize on Salesforce. Here’s how: The firm, which closed a $25 million debut investment vehicle, landed investments from 21 Salesforce-acquired founders, while Chan himself built the company that he says is the foundation of Einstein, the AI initiative across all of Salesforce businesses.
With the backing of alumni and advisors, the firm hopes it can help early-stage enterprise startups land extra support and, of course, fresh capital.
Here’s why it’s important: Mafia funds can be exclusive, both in which LPs are invited to the table and which companies land funding. In a statement to TechCrunch, Chan said that the firm’s investment scope is “way beyond the Salesforce app ecosystem” and that founders do not need to be Salesforce alumni to be considered. Right now, 35% of Firsthand Alliance’s portfolio is founded or co-founded by females, and 50% of the portfolio is co-founded or founded by people of color.
Impressive. And, well, interestingly timed considering both the layoffs and the tensions seeping out from the mothership as we speak. Maybe now is the time to capitalize on changes happening on the old stomping grounds?
- Some Salesforce employees just found out they’re part of the 10% layoff announced last month
- Board changes could signal Salesforce’s willingness to appease activist investors
- Salesforce turmoil continues into new year, as recent layoffs attest
- Can 4 activist investors play nice in the Salesforce sandbox?
There’s nothing like a good comeback story to follow up on, am I right? Instagram’s co-founders are back with a new social app, looking to make news consumption easier and smarter. The startup, Artifact, is accepting people on its waitlist as we speak.
Here’s why it’s important: Artifact is eyeing a controversial business because it has to do with news consumption, control, algorithms and, no offense, easily persuaded consumers. If you’re raising your eyebrows at all the potential issues that may arise from this company, you’re not alone. We talk about the news and why we’re hopeful anyway on Equity.
- Pinterest lays off 150 people as a part of its ‘long-term strategy’
- Is Instagram considering paid verification? Code reveals references to a ‘paid blue badge’
- Three months ago, he was laid off from Twitter. Now his competing app Spill is funded.
- Snapchat now has more than 2 million paid subscribers
- This tweet by VC Matt Turck.
- Shoutout to this wonderful newsletter, Axios San Francisco, written by former TechCruncher Megan Rose Dickey and Nick Bastone, founder of The SF Minute.
- Speaking of shoutouts, I’m so excited for “The Romantics” to get on Netflix.
- I’ll be at the Upfront Summit in LA next month. Who should I meet? And what should I eat? (For context: I love talking to humans, and I am vegetarian.)
- If you missed Startups Weekly last week, catch my last issue here: “The latecomer advantage in startups.”
- TechCrunch is coming to Boston on April 20. I’ll be there with my favorite colleagues to interview top experts at our one-day founder summit TechCrunch Early Stage 2023. Book your pass ASAP! Speakers include Techstars’ Kerty Levy, Construct Capital’s Dayna Grayson, and NFX’s James Currier.
Seen on TechCrunch
Car-sharing SPAC Getaround lays off 10% of staff
Car-sharing platform Getaround gets delisting warning from NYSE
There are still robotics jobs to be found (if you know where to look)
Apple stock drops on rare earnings miss
Coinbase’s asset recovery tool just saved my bacon
Seen on TechCrunch
Pitch Deck Teardown: Laoshi’s $570K angel deck
Dear Sophie: What H-1B and other immigration changes can we expect this year?
Which open source startups rocketed in 2022?
What do recent changes to state taxes mean for US SaaS startups?
Why invest in Ukrainian startups today?
This was one of those weeks that was filled with energizing conversations with entrepreneurs, both seasoned and fresh, who remind me what an ambitious world tech is. Even with the hurdles facing techies from quite possibly every angle, it’s rejuvenating to see how the hope of an idea can push farther than reality.
On that earnest note, always,
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.