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Laid off from your tech job? Day One wants to give you $100,000 to start a company • ZebethMedia

By zebethcontrolPosted on November 8, 2022Posted in day one, Layoffs, Startups, stripe, TwitterNo Comments

Day One Ventures, a venture firm launched in 2018 with a pitch to combine venture capital acumen with marketing and communications support, has launched a program aimed explicitly at those impacted by tech layoffs this year. The program, titled “Funded Not Fired”, will write $100,000 checks into 20 startup teams by the end of the year. Top businesses from the cohort will then get follow-up capital from Day One Ventures commitment to lead their pre-seed round with a $1 million check. In total, the firm is allocating at least $5 million from its $52.5 million fund to back founders spinning out of turbulent startups. Founder and GP Masha Bucher, who left her former life in Russia as a politician and TV reporter to become a venture capitalist, spun up the program in the wake of Stripe and Twitter’s layoffs over the past week. Her bet? At least 0.1% to 1% of the thousands of employees impacted by tech layoffs this year could become incredible founders. The program is essentially a formalized double click on venture’s obsession with mafia founders, aka people who left high-profile gigs at even higher-profile companies to start their own business. The added layer of complexity, however, is the downturn that has somewhat defined tech’s 2022. For example, if I was laid off from my job, I don’t know if my first thought would be to take a bet on myself and start a risky business most likely to fail. Per Bucher, however, that mindset is exactly what would weed me (and presumably a lot of laid off tech employees) out from the entrepreneurship world anyways. “I think if you’re afraid of risk, you’re just not going to be a great founder,” Bucher said. “Don’t get me wrong, starting a company in this time when so many changes have happened over the last three years,” is hard, she added, saying that it definitely makes sense if people want to find a job or work with founders instead of become one. Other examples of programs spun up to help activate the next generation of entrepreneurs includes Z Fellows and Cleo Capital’s former fellowship for laid-off workers. She made sure to emphasize that the program is “not charity” and that folks from Stripe and Twitter would not get preferential treatment when pitching Day One Ventures (even though they were the inspiration for the program). Aspiring founders don’t need an incorporated company, or even a fully flushed out startup idea, to apply to the program. The form asks for founders background, top ideas, metrics, and the why behind their journey into entrepreneurship. In order to be qualified for the accelerator, at least one co-founder must have been recently laid off, they must go full time on the startup, and be able to show three references. The deadline to apply is November 25, 2022 and final decisions will be made by December 20, 2022. “Compared to all other VCs who are taking time off until next year, we’re going to be working until December 31st – which is totally fine,” Bucher said. “I just feel like times like this are just a perfect opportunity for us to do a little more, to go the extra mile, to not take time off and just hopefully back some companies which in the future will be the size of Coinbase, Airbnb and Stripe.”

VCs decipher the recent fintech layoffs — and why they’re happening now • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in Chime, EC Fintech, EC venture capital, Fintech, Layoffs, startup valuations, Startups, stripe, tech layoffsNo Comments

Many big companies in the fintech world cut jobs in the past month. And yet Stripe’s announcement it would lay off 14% of its workforce still made a splash, proving that unicorns and decacorns are not immune to the challenging economic and fundraising conditions. The Stripe news closely follows Chime confirming this week that 12% of its employees would be laid off and Brex revealing last month that it was cutting 11% of its workforce. So what the heck is going on here? Well, according to Spiros Margaris, a fintech venture capitalist and founder of Margaris Ventures, the current layoffs by some of these larger fintech companies were “caused by the challenging geopolitical market environment and inflationary pressures. It affects the whole fintech startup industry — and globally all industries — since the prominent players have a strategic ripple effect on the smaller players.” “Laying off good employees endangers their strategy to succeed in the grand vision they initially sold to the VC.” Spiros Margaris, founder of Margaris Ventures Cameron Peake, a partner at Restive Ventures who recently invested in AiPrise, concurred, noting via email that much of what we are seeing today “were the dynamics we saw play out last year,” including all of the “large funding rounds, sunny market projections and a belief that companies needed more people to fuel their growth.” What resulted was “a lack of discipline around company fundamentals,” she added. While the frenzy was dissipating, it was then that companies “realized they were not only ahead of their skis but that they needed to cut back in order to focus more on profitability,” she said.

Most of the unicorns aren’t • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in Brex, Equity podcast, Layoffs, Onward, Startups, stripe, VentureNo Comments

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. Oh what a week. What a week. Things are busier than ever at ZebethMedia, where we’re coming out of our post-conference stupor and charing straight back into a packed news cycle. Sure, Musk is still making waves, but there are startup rounds to cover, layoffs to chew on, earnings coverage, unicorn reports, new data, and more. After cutting back sharply on material and still going long, here’s what Mary Ann, Natasha, and Alex got into this week: Rewind wants to help people with their memory. We talk about how the startup, which launched this week, uses recording technology to help you get what you see, hear and say at your finger tips. We talked about Onward, a startup that wants to help divorced or separated parents fight less about money and how it just raised nearly $10 million despite being pre-revenue. The somewhat odd, possible Byju’s IPO-spinoff of Aakash, a tutoring company that it bought the other year. Our views can be summarized in meme format: An edtech IPO? In this economy? Unicorns face an incredibly uphill journey to get public, which may explain in part why Byju’s is not itself going public (recall that it had had plans, but like with so many other companies those are on hold). And then there was Brex, which announced a new partnership with Techstars despite a big push into the enterprise space. Stripe revealed that it has cut 14% of its staff, or over 1,100 people, and its CEO and co-founder Patrick Collison admitting that the payments giant had “overhired for the world we’re in.” And finally, there’s a new VC ratings company in the neighborhood. How do we feel? Better than some VCs, at least. Got all that? Good. More Monday morning. Equity drops at 7 a.m. PT every Monday and Wednesday, and at 6 a.m. PT on Fridays, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. ZebethMedia also has a great show on crypto, a show that interviews founders, one that details how our stories come together, and more!

Stripe cuts 14% of its workforce, CEO says they ‘overhired for the world we’re in’ • ZebethMedia

By zebethcontrolPosted on November 3, 2022Posted in Fintech, patrick collison, Startups, stripe, Stripe LayoffsNo Comments

Stripe has announced that it’s laying off 14% of its workers, impacting around 1,120 of the fintech giant’s 8,000 workforce. The latest round of layoffs follows a string of cutbacks in the fintech sphere, with Brex last month revealing it was scything 11% of its workforce, while just yesterday Chime confirmed that 12% of its employees would be laid off. In a memo published online, Stripe CEO Patrick Collison conveyed a familiar narrative in terms of the reasons behind the latest cutbacks: a major hiring spree spurred by the world’s pandemic-driven surge toward ecommerce, a significant growth period, and then an economic downturn ridden with inflation, higher interest rates, and other macroeconomic challenges . “We overhired for the world we’re in, and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe,” Collison wrote. While there is never a perfect way to handle such a large-scale round of layoffs, Collison’s announcement is notable in terms of the degree to which he accepts blame for the situation, pointing to two specific mistakes the company’s leadership made. He wrote: In making these changes, you might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important: We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown. We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in. Today’s announcement perhaps doesn’t come as a huge surprise. While Stripe’s long-anticipated IPO remains in the balance, its own internal valuation reportedly dropped 28% from $95 billion last year to around $74 billion. And back in August, ZebethMedia learned of a smaller round of layoffs at Stripe, impacting a reported 45-55 workers at TaxJar, a tax compliance startup it acquired last year. In terms of severance, Collison noted that all those impacted would receive at 14 weeks worth of pay, depending on time served at the company. On to top of that, he noted said that Stripe will pay the full 2022 annual bonus irrespective of when each employee leaves, though it will be pro-rated if they only joined this year. Additionally, he said that all unused paid time off (PTO) will be paid, and Stripe will provide healthcare coverage for six months following each departure.

Forget flat — small cuts are the new up • ZebethMedia

By zebethcontrolPosted on October 20, 2022Posted in Databricks, EC Newsletter, EC venture capital, Startups, stripe, The Exchange, VentureNo Comments

When venture markets flip from greed to fear, there’s a meme that goes around in startup circles that flat is the new up. It’s shorthand for the idea that in more difficult market conditions, a startup defending its prior valuation in a proximate venture round is as good as raising new capital at a higher valuation in better investing conditions. The brutal repricing of tech companies in the last year has led to some notes — including from this publication — that we had once again found ourselves in flat = up territory. Today, however, the game looks a little bit different. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. News that Stripe is reportedly trying to execute a soft layoff by culling lower-performing staff landed today, along with news that Databricks, one of the other most valuable startups of all time, trimmed its internal (409A) valuation by a modest amount, around 7%. Naturally, you might look at the news and think, dang, some of those unicorns did get out of pocket last year! After all, fintech giant Stripe took a 28% haircut to its own internal valuation earlier this year, so surely we’re seeing signs of excess being drained out of the market? Actually no, not really.