![]() ![]() “They're choosing to wait more because they want more information and they want to understand kind of how their company will fare in a market that values companies potentially differently,” he said. The biggest behavioral shift that Gonen’s seen so far is tech employees pausing and thinking through their decisions instead of just exercising their options immediately.“The reason they're so cautious is because a lot of companies are talking to their teams and saying, ‘Hey, you know this next round is going to be difficult, right? And it's not guaranteed to kind of go up and to the right forever.’” “People are definitely cautious,” Gonen said, noting that he’s heard it more from later-stage companies than those in seed stage. But in the aftermath of Fast’s implosion and with some firms effectively leaving portfolio companies for dead, a startup going to zero overnight is suddenly much less of a hypothetical for many tech workers, and having equity underwater is increasingly more likely.As co-founder of a tech-centric wealth manager, he’s found that many startup employees don’t understand the implications of exercising their options, especially in the bull market of the last few years. “The idea of their startup going to zero or shutting down was not exactly on their radar,” Compound CEO Jordan Gonen told me. For some startup employees, this pullback is the first time they’re having to think about what happens if it all goes belly up.Despite often bearing the brunt of it (just see the examples above), employees are often the ones with the least visibility into how a business is performing and the fewest number of protections if things do go south. “This will take you out of the ‘probably gonna die’ bucket and put you into the ‘they’re gonna make it’ pile, as VCs sort harder.”īut there’s one thing missing in the startup valuation conversation: employees. “Highly recommend getting close to break even if you can, typically by cutting costs, raising prices, and getting laser focused on what’s essential,” Jason Calacanis tweeted. VCs have been ringing their own alarms, telling founders to wrap up their funding as quickly as they can and accept whatever price they need to to make it happen.Other companies are trying to quickly dole out stock grants to help employees who are already underwater after joining in the peak of the pandemic. As part of disastrous earning weeks, Robinhood cut 9% of its staff and Netflix laid off writers from its Tudum site.There’s plenty of signs that times have changed, starting at the top in the public market and then trickling down into startups. Calling the bubble “burst,” however, has been shown to be a bad practice. In the last few weeks, every conversation I’ve had with a VC or startup CEO has had a similar refrain: Has the music stopped, or is it just slowing? Most VCs seem to agree there is a pullback happening, and some deals just aren’t getting done. The value of deals in the United States has totaled about $1.2 trillion so far this year, compared with $2 trillion in 2021, according to the data firm Dealogic.We don’t talk about employees, no, no, no! “It’s more a reflection of how well Figma is doing as a business, how much thought leadership the combination of Adobe and Figma will have and the strength of the management team.”Īdobe’s purchase of Figma coincides with a cooling in deal-making and decreased valuations for technology companies as recession fears build. “It’s happening in a market that has cooled down for technology companies as a whole,” said Danny Rimer, a partner at the venture capital firm Index Ventures, Figma’s biggest backer. The company allows multiple people to collaborate on design projects in the same files at once. ![]() Adobe, one of the world’s largest software companies, said on Thursday that it would acquire the design platform Figma for $20 billion, a deal that comes amid a slump in merger activity in the tech world.įigma, which was founded in 2012, has raised more than $ 332 million in funding, according to Crunchbase, and was valued at $10 billion in 2021. ![]()
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