Jan 3 (Reuters) – Nic Szerman lost his job at Meta Platforms (META.O) in November, just two months after joining full-time, victim of a drastic 13% cut in the workforce as the market for advertising was collapsing.
A few days later, he was back at work, looking for investments for his own company Nulink, a blockchain-based payments company, and sent proposals to the startup accelerator Y Combinator and the fund of Cryptocurrency from Andreessen Horowitz.
“As counterintuitive as it may seem, this layoff has left me in a very good position,” the 24-year-old said. “Because I don’t have to repay the opening bonus, I get four months’ salary, and now I have time to focus on my own project.”
Szerman is part of a wave of would-be entrepreneurs emerging from the ashes of the massive job losses seen in Silicon Valley in the second half of 2022, according to venture capitalists.
US tech giants including Meta, Microsoft (MSFT.O), Twitter and Snap (SNAP.N) have purged more than 150,000 employees, according to Layoff.fyi, which tracks tech job losses.
While global venture capital (VC) funding fell 33% globally to around $483 billion in 2022, seed funding has been robust, with $37.4 billion raised in seed rounds. so-called angel or seed table, in line with the record level recorded in 2021, according to data from the research company PitchBook.
Day One Ventures, an early-stage venture capital fund in San Francisco, launched a new initiative in November to fund startups founded by people who had been laid off from their tech jobs, touting the slogan “Finded, not Fired “.
The program aims to cut 20 checks of $100,000 by the end of 2022. Day One said it received more than 1,000 applications, most from people who were released by Meta, Stripe and Twitter.
“We’re investing $2 million in 20 companies – if we find just one unicorn it almost makes the fund, which I think is a really unique opportunity for us as fund managers,” said Masha Bucher, co-founder of Day One Ventures.
“Looking at the last economic cycle, companies like Stripe, Airbnb, Dropbox were created in crisis.”
HOT: GAMES AND AI
Also in November, multi-stage fund Index Ventures, which has funded Facebook, Etsy and Skype, launched its second Origins fund, which will invest $300 million in early-stage startups.
US Silicon Valley investor US Venture Partners and Austrian venture capital firm Speedinvest have meanwhile earmarked a similar amount for newly-created companies.
Investors highlighted gaming and artificial intelligence among hot areas of interest.
“With advancements in game design, new innovations like cloud gaming, and the rise of social media in this space, gaming has truly transcended mainstream culture,” said Sofia Dolfe, partner at Index Ventures.
“In every period of economic uncertainty, there is an opportunity – to reset, to reprioritize and to refocus energy and resources.”
BUBBLE DOTCOM 2.0
Szerman said his project had been rejected by Y Combinator, while he had not yet heard from Andreessen Horowitz, although he added that other early-career venture capitalists had expressed their interest.
“I told investors that we will discuss in two or three months,” he added. “I will focus on scaling the system now.”
Some investors have compared the 2022 downturn to the dotcom crash of the early 2000s, when dozens of overvalued startups went bankrupt, flooding the market with talent and helping spark a wave of new companies such as Facebook and YouTube.
“A lot of great companies were started in relatively dark times,” said Harry Nelis, managing partner of investment firm Accel, which sees a new generation of risk-takers emerging among the swathe of unemployed.
Some industry players say former Big Tech employees are ideally placed to start their own businesses, having seen first-hand how some of the world’s biggest companies work and benefiting from continued access to their network of colleagues. highly qualified.
A former Googler has sought to help others like him seek a life after the tech giants. In 2015, Christopher Fong, who spent nearly a decade working for the California tech titan, launched Xoogler, a project designed to help former employees looking to start their own businesses. Since then, the group’s membership has grown to over 11,000.
Fong told Reuters that the experience at a Big Tech company gave the founders a “strong brand that can be leveraged to meet investors, potential customers and recruit team members.”
Reporting by Martin Coulter in London, Supantha Mukherjee in Stockholm and Krystal Hu in New York; Assembly Pravin Char
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