turn down for what? – techcrunch

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Gumroad’s Sahil Lavingia entered the venture world as one of the early testers of Rolling Fund, an AngelList product that allows investors to raise capital on a subscription basis. That was in 2020. Fast-forward to 2022 and a lot has changed.

One of those changes? The number of pitches from founders looking to increase. “Since March, it has gone down about 90%,” Lavingia told Meczyki.Net. “I was probably seeing the most — about 20 to 40 well-checked decks a week — and that number has now dropped to about two to four a week.” They have also observed that the quality of talent increases for those willing to work. gumrod — which he attributes partly to the steady stampede of layoffs — and the decline of founders starting companies.

The decline in the number of founders raising capital suggests that early-stage startups are not as protected from macroeconomic changes as some investors claim; Conversely, the boom of new startups would support the idea that a recession – and the accompanying layoffs – is the time when startups are born.

Lavingia divided the status of founders into three buckets: “tourist founder, immigrant founder and ‘born and raised’ founder.” Tourist founders are the ones who start companies only in bull markets, he said, adding that a group has lost almost 100%.

“They are rarely fundable in bear markets,” Lavingia said. “They have to hire others to make the stuff.” Immigrant founders, meanwhile, care less about the reputation and status of starting a company but weigh its risk and return. This founding group has been cut in half, according to Lavingia. Finally, “born and raised” founders are founders regardless of the market: “They all existed and therefore raised money in 2020-2021, so they are also not starting companies and raising money at the same rate.” Huh.

There are two sides to early-stage venture capital: investors who accept that talent has shifted and those who stand by the flow of the deal that is as loud as ever.

If you want to read my full take, check out my Meczyki.Net+ column, “Investors Preparing for a Founders Recession. or inward. Who’s waiting?”

In the rest of this newsletter, we’ll join the debut fund managers on Y Combinator’s shrinking class size and their collective mood. As always, you can support me by forwarding this newsletter to a friend or following me on twitter,

Y Combinator cuts its square size

Y Combinator says it has intentionally reduced the number of startups within its accelerators for its 2022 batch of summer batches. As previously reported by Information And independently verified by Meczyki.Net, Y Combinator’s Summer 2022 cohort — currently in action — boasts about 250 companies, down 40% from the previous cohort, which landed in 414 companies.

Here’s why it’s important: Over the years, Y Combinator’s ever-increasing batch size has become a common – if not cliche – conversation among tech experts. I know this because we contribute a lot to this conversation (especially on equities). The biggest issue people have with YC’s growing class size is that it threatens one of the accelerator’s biggest value propositions: networks. The bigger the square, the more difficult it is to stand out.

While YC says it didn’t hold back because of criticism or the cost of its increasing check size, the move will certainly help those within the existing group due to a lack of competition.

image credit: Bryce Durbin

Thoughts of first time fund managers

Meczyki.Net+’s Rebecca Szcutaco Led the latest investor survey, which examines temperatures from seven first-time fund managers who find themselves at the start of a recession. What are the advantages of first time VCs over more experienced competition in a challenging market? What steps are they taking to prepare for the fourth quarter? What is keeping them up at night given the market conditions today? These are all questions they answer and more in this piece now live on the site.

Here’s what’s important: There is always a ray of hope, but especially if you have a small portfolio. Szkutak gives us a teaser excerpt below:

“We don’t carry any items that may have come with past funds or tied up in a lot of capital that seems to be an overly valuable vintage,” Stutto said. “Like a founder who sees the world differently than subject matter experts, we (first-time managers) bring a fresh perspective on how certain problems and industries are evolving.”

Reading Survey of Szkutakand his additional analysis ofon the site.

A Fully-Fruited Orange Tree Is Being Cut Down In The Desert Landscape Of Southern California;  Are Investing For The First Time In The Grip Of Recession

image credit: Stephen Swintake (Opens in a new window) / Getty Images

If you missed last week’s newsletter

Read it here: “Coming Bootstrapped, Coming Bootstrapped.” I also recorded a companion podcast with my favorite coworker Alex, which you can listen to here: “Is it time to jump on the bootstrapper’s enterprise treadmill?”

Any requests for topics on Startups Weekly or Shows for Me? Tweet me a big question And I’ll look into that in the upcoming Startup Weekly or Equity.

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image credit: Martin Baroud (Opens in a new window) / Getty Images

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and that’s a wrap. I’m going to the lake to enjoy these last few summer weekends. Your care!

talk soon,