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Startups are pummeled in the ‘great unwinding’

nytimes.com

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Re: Startups are pummeled in the ‘great unwinding’

#11

Post by x0x0 »

yingw787 wrote: post #3

I've heard numerous times startups have had a hard time getting a smaller amount of funding from angels and VCs. As in, "I want $500k" and "no, we only do deals with $1M+", or something like that. I thought that was crazy. This is probably the pendulum swinging back, as pendulums do. I am interested in how this situation affects larger companies. My guess is since they're so much larger this time around than back in…

Probably this is focused on ownership and there's miscommunication. VCs don't care that much about dollars; they want 18%+ ownership or even big returns aren't material to them.

Re: Startups are pummeled in the ‘great unwinding’

#12

Post by _bxg1 »

cowsandmilk wrote: post #5

Classpass was founded in 2013. Wonderschool was founded in 2012. Can we stop calling companies that age a startup? Or at least stop using them as examples? I mean, the article then goes on to call Airbnb a "home rental start-up". It isn't a start-up, it is over a decade old and has over 10,000 employees.

And yet we all know what they mean when they call those companies "startups". The term has drifted pretty far from its original meaning, but it does carry a new meaning even though it's almost completely different

Re: Startups are pummeled in the ‘great unwinding’

#13

Post by rudolph9 »

bluedino wrote: post #2

Isn't this just accelerating the inevitable for many of these companies?

Yes and no. Yes; lots of startups fail and now just fail sooner. No; many who would have otherwise found a foothold now have to re-examine their path forward.

The startup I worked for until last Thursday is going through this. Despite most other startups in the space folding and the sales team finally getting traction with lots of buyers giving a path to becoming a viable business, those companies that were eager to sign contracts a month ago are having to rethink their cashflow and deciding if changing anything in their existing business is worth the risk.

Re: Startups are pummeled in the ‘great unwinding’

#14

Post by benatkin »

cowsandmilk wrote: post #5

Classpass was founded in 2013. Wonderschool was founded in 2012. Can we stop calling companies that age a startup? Or at least stop using them as examples? I mean, the article then goes on to call Airbnb a "home rental start-up". It isn't a start-up, it is over a decade old and has over 10,000 employees.

Another thing that's more than half a decade old is your objection. The term "startup" has come to have a broad meaning. The meaning of words changes over time. Fortunately, new terms often come along to fill gaps. In this case there is the term early-stage startup.

Re: Startups are pummeled in the ‘great unwinding’

#15

Post by School-Cotton »

cowsandmilk wrote: post #5

Classpass was founded in 2013. Wonderschool was founded in 2012. Can we stop calling companies that age a startup? Or at least stop using them as examples? I mean, the article then goes on to call Airbnb a "home rental start-up". It isn't a start-up, it is over a decade old and has over 10,000 employees.

For better or worse, in colloquial American English, "startup" means a particular type of company, and is only weakly correlated with age.

Re: Startups are pummeled in the ‘great unwinding’

#16

Post by [deleted] »

cowsandmilk wrote: post #5

Classpass was founded in 2013. Wonderschool was founded in 2012. Can we stop calling companies that age a startup? Or at least stop using them as examples? I mean, the article then goes on to call Airbnb a "home rental start-up". It isn't a start-up, it is over a decade old and has over 10,000 employees.

[deleted]

Re: Startups are pummeled in the ‘great unwinding’

#17

Post by hn_throwaway_99 »

> For start-up workers, the past few weeks have been sobering. Many had bought into the tech industry’s change-the-world ideals, had few boundaries between their work and personal lives and hoped for big payouts if their start-ups went public.

This saddened me, because it's a refrain that we hear over and over and over. Same exact thing happened during the .com bust (which scares me to believe that was 20 years ago already).

You can work really hard at a startup, put in a ton of energy, but at the end of the day, never forget it's just a business. It's a team, not a family, and in a team sometimes team members get cut. I've also found that the best folks in business tend to have rich, fulfilling lives outside of business as well.

Re: Startups are pummeled in the ‘great unwinding’

#18

Post by Jagat »

cowsandmilk wrote: post #5

Classpass was founded in 2013. Wonderschool was founded in 2012. Can we stop calling companies that age a startup? Or at least stop using them as examples? I mean, the article then goes on to call Airbnb a "home rental start-up". It isn't a start-up, it is over a decade old and has over 10,000 employees.

People often (wrongly) refer to pre-IPO companies as startups.

Chick-fil-a, the chicken sandwich 40 year old startup.

Re: Startups are pummeled in the ‘great unwinding’

#19

Post by AznHisoka »

ilikehurdles wrote: post #6

It's hardly unique to startups, and has more to do with the industries they're in than the company size. Mine is still hiring very aggressively but we are in the health research industry which didn't face the same sort of "unwinding", and have always been remote so there's no empty office we're obligated to pay rent for. Meanwhile I have friends in very established publicly traded companies who have been laid off or…

Yep it is strange the author chose to focus on startups here. Almost every single company will be negatively impacted in the next few months to years (save for a handful of companies like Amazon/Walmart).

Re: Startups are pummeled in the ‘great unwinding’

#20

Post by cortesoft »

tedivm wrote: post #8
yingw787 wrote: post #3

I've heard numerous times startups have had a hard time getting a smaller amount of funding from angels and VCs. As in, "I want $500k" and "no, we only do deals with $1M+", or something like that. I thought that was crazy. This is probably the pendulum swinging back, as pendulums do. I am interested in how this situation affects larger companies. My guess is since they're so much larger this time around than back in…

From what I've been hearing VCs are worried this is going to last awhile, and so they don't want to give small amounts of money to a company knowing it isn't enough to ride through this. If you only ask for enough funding for a year and the VCs believe the economy won't improve for another two then they aren't going to put money in.

But the "give way more money to the startup" really peaked in 2018, when we didn't have a bad economy.
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