Welcome to Startups Weekly, a nuanced look at this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. Subscribe to receive it in your inbox here.
Towards the end of 2022, a number of entrepreneurs, some of whom quoted Elon Musk, told me they are bringing back a personal work culture the following year to foster productivity and, in some cases, loyalty. One founder even told me over drinks and fancy bites that they weren’t worried about losing talent – because those who leave just because there’s a personal mandate weren’t really mission-driven to begin with.
While some founders are clearly set for a comeback, others are confused. There’s the argument—sometimes coming from venture capitalists desperate for portfolio companies to succeed—that being personal will help increase productivity, and ultimately profits. And there’s also the counter argument that remote work makes for more inclusive and comprehensive recruiting, which could also help, well, the bottom line.
And if 2023 isn’t the bottom line year, I don’t know what else could be. Kruze Consulting, an accounting firm for startups, has sifted through the finances of more than 750 companies, including more than $300 million in quarterly revenue and more than $750 million in quarterly expenses. I spoke to Healy Jones, who conducts financial planning and analysis for Kruze Consulting, about his findings – and the results, he thinks, provide 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 remainder of this newsletter, we’ll talk about boisterous venture firms, Salesforce spinouts, and Artifact. As always you can follow me Twitter or Instagram.
On paper, venture capital appears to be back. The flurry of new funds makes me and more importantly the founders feel like VCs are back in business and ready to write loads of checks. But it could be argued that the announcement dates of new venture capital funds, like the phrase “oversubscribed”, don’t mean much in practice.
Here’s why this is important: There are many reasons why all dry powder isn’t as bouncy as we might hope. While new fund announcements are certainly exciting, the fund may already be partially invested and investors should raise capital before writing those checks. The signal to watch isn’t so much about new money entering the venture space, but more about: Why is this venture capital firm announcing their fund now, versus sooner, versus later? What is the argument to show that you are now playing offensively? I imagine it’s more complicated than business as usual.
Salesforce, sales fund
Firsthand Alliance, led by solo investor Simon Chan, is a venture capital firm looking to capitalize on Salesforce. Here’s how: The company, which closed an initial $25 million investment vehicle, raised investments from 21 founders acquired by Salesforce, while Chan himself built the company he says is the foundation of Einstein, the AI initiative in all Salesforce Companies.
With the support of alumni and advisors, the company hopes to help start-up startups bring in 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 raise funding. In a statement to australiabusinessblog.com, Chan said the company’s investment scope “extends well beyond the Salesforce app ecosystem” and that founders don’t have to be Salesforce alumni to qualify. Currently, 35% of Firsthand Alliance’s portfolio is founded or co-founded by women, and 50% of the portfolio is co-founded or co-founded by people of color.
Impressive. And, well, interestingly timed given both the layoffs and the tensions seeping out of the mothership right now. Perhaps now is the time to take advantage of changes taking place on the old stomping grounds?
There’s nothing like a good comeback story to follow up on, am I right? The co-founders of Instagram are back with a new social app that aims to make news consumption simpler and smarter. The startup, Artifact, is currently accepting people on the waiting list.
Here’s why it’s important: Artifact has its eye on a controversial business because it deals with news consumption, control, algorithms and, no offense, easily persuaded consumers. If you frown at all the potential issues that could arise with this company, you are not alone. We talk about the news and why we’re still hopeful about Equity.
Seen on australiabusinessblog.com
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This was one of those weeks filled with stimulating conversations with entrepreneurs, both seasoned and fresh, who reminded me what an ambitious global technology is. Even with the hurdles techies face from virtually every angle, it’s rejuvenating to see how the hope of an idea can stretch beyond reality.
In that sincere tone, always,