Great Time to Start a Company, Tough Time to Be Running One

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Hi! I took a month or so off from writing, largely because so much was in motion, that I needed to get some work done and process a bit before committing thoughts to, err, paper? We hit 18 months on the Homebrew Forever model (and just closed our 20th investment using personal capital) so lots to share on that front soon’ish. And Screendoor, our fund of funds backing emerging managers from underrepresented populations, continues to amaze me in ways I didn’t anticipate (more on that soon’ish as well). But first, stretching the blogging muscles with some general ‘state of the nation’ posts.

IT’S A GREAT TIME TO START A COMPANY BUT A TOUGH TIME TO BE RUNNING ONE

Great Time to Start

  • Founders with 3-10 years of startup tenure, having gone through hypergrowth (the good and the bad), often with prior experience working together, and a strong POV on a problem to be solved. I don’t think I’ve seen as many combos like this since we started over a decade ago.
  • Less market pressure to spend ahead of PMF, fewer overfunded competitors doing the same thing, etc
  • Macroeconomic concerns and softness in tech markets mean that legacy companies have underinvested in their own non-core initiatives (creating holes for startups) and tight headcount/budgets mean they’ll buy vs build pieces they need.
  • Talent on the market being shed by larger companies and last generation of zombie startups.
  • Beginning of thaw in the venture markets, especially at seed.

Tough Time to Be Running a Startup

  • We are absolutely not through the worst of the pain from the market reset. Lots more wind downs, restructures and soft landings coming [this is important enough to be its own post shortly].
  • Customer budgets are still tight, especially in tech.
  • Layoffs and lack of hiring at customers means many SaaS/per seat/usage B2B companies are fighting ACV contraction where you need to add new logos just to show marginal growth, let alone 2x+ YoY.
  • Many companies haven’t fully optimized for what it means to be hybrid/back in office.
  • It’s just been a stressful few years!

Ok, my goal is to follow-up quickly with:

  1. For VCs There’s Still a Lot of Pain Coming
  2. Soft Landings Are Really Soft Right Now
  3. Why Shutting Down Correctly Matters
  4. “Cash on Hand” Is The Most Polarizing KPI in Startups