Nic Szerman lost his job at MetaPlatforms in November, just two months after joining full-time, after suffering a drastic 13% reduction in its workforce as the advertising market cratered.
A few days later he was back at work, seeking investment for his company Nulink, a blockchain-based payments company, and has sent pitches to startup accelerator Y Combinator and Andreessen Horowitz’s cryptocurrency fund. .
“As counterintuitive as it may sound, this layoff has left me in a really good position,” the 24-year-old said. “Since I don’t have to pay back the sign-on bonus, I get four months’ salary, and now I have time to focus on my project.”
According to Venture Capitalist, Szerman is part of a wave of aspiring entrepreneurs rising from the ashes of massive job losses in Silicon Valley in the second half of 2022.
US tech giants including Meta, Microsoft, Twitter and Snap have laid off more than 150,000 workers, according to Layoff.fyi, which tracks technology job losses.
While overall venture capital (VC) financing fell 33 percent globally to about $483 billion in 2022, early-stage financing remained strong, with so-called angel or seed funding expected to hit record levels in 2021. $37.4 billion raised in rounds of to data from research firm PitchBook.
DayOne Ventures, an early-stage venture fund in San Francisco, launched a new initiative in November to fund startups founded by people who have been laid off from their tech jobs. Not Fired”.
The goal of the program is to cut 20 checks of $100,000 by the end of 2022. Day One said it received more than 1,000 requests, most of them from people who were cut off by Meta, Stripe and Twitter.
“We’re investing $2 million in 20 companies — if we find just one unicorn it almost makes the fund back, which I think is a really unique opportunity for us as a fund manager,” Day said. said Masha Butcher, co-founder of One Ventures.
“Looking at the last economic cycle, companies like Stripe, Airbnb, Dropbox were born in the crisis.”
Hot: Gaming and AI
Also in November, multistage fund Index Ventures, which has bankrolled Facebook, Etsy and Skype, launched its second Origin fund, which will invest $300 million in early-stage startups.
Silicon Valley investors US Venture Partners and Austrian VC firm Speedinvest have meanwhile committed similar amounts to start-ups.
Investors highlighted gaming and artificial intelligence as hot areas of interest.
“With advances in game design, new innovations like cloud gaming, and the emergence of social networking in the field, gaming has truly become part of mainstream culture,” said Sophia Dolph, partner at Index Ventures.
“In every period of economic uncertainty, there is an opportunity to realign, re-prioritize and re-focus energy and resources.”
Dotcom Bubble 2.0
Szerman said his plan was rejected by Y Combinator, while he has yet to hear back from Andreessen Horowitz, although he added that other early-stage venture capitalists had expressed interest.
“I told the investors that we will talk in two or three months,” he added. “I will now focus on scaling the system.”
Some investors have compared the 2022 downturn to the dot-com crash of the early 2000s, when dozens of overvalued startups collapsed, flooding the market with talent and fueling a wave of new companies like Facebook and YouTube. Helped to give birth.
“Many great companies have been built in relatively dark times,” said Harry Nellis, managing partner at investment firm Accel, which sees a new generation of risk-takers emerging among the unemployed.
Some industry players say former Big Tech employees are uniquely placed to start their own companies, seeing first-hand how some of the world’s largest firms operate, and their highly skilled colleagues. Enjoying constant access to the network.
A former Googler has tried to help others like him who are looking for life after the tech giants. In 2015, Christopher Fong, who spent nearly a decade working for the tech titan in California, launched Xoogler, designed to help ex-employees hoping to start their own companies. Since then, the group’s membership has grown to more than 11,000.
Fong told JEE News that the experience at the big tech firm gave the founders a “strong brand that can be leveraged to recruit investors, potential customers and team members”.
