Tech forgot its umbrella

Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe here.

It kind of feels like tech forgot its umbrella. Like, it remembered to pack its water bottle, wear the right shoes and layer up, but when it came time to officially go outside — and say, face the year ahead — it realized that a waterproof hoodie wasn’t enough. It needs an industrial umbrella.

You know what I mean?

Here’s what I’m dancing, or, erm, writing, around. It feels like the macroeconomic environment has been reasonably volatile for the past year; and we’re still seeing entrepreneurs react to the market as if it just happened to knock on their door, trip them over and proceed to steal all their belongings. I’m not saying that founders and investors should have perfectly predicted what Q1 of this year should look like; I’m just wondering how long we’re going to get “the economy” as a catalyst for hard decisions.

What finally gets a CEO to step down? What finally gets a company to conduct its third round of layoffs? Is it the economy, or is it a uniquely human decision that comes just months after you were told to grow at all costs? When we’re talking about pivots and layoffs, I think it’s important to talk about the realities of shifting to deal with the new normal. Abstractions such as the economy just fall flat now that it’s been more than a few months since the markets have been grey.

I guess what I’m trying to say is, you can probably leave your house during a drizzle and end up at the grocery store just a little damp. If you forget your umbrella during a downpour, well, now you’re soaking wet and no one feels that bad for you. Don’t forget them, and better yet, sport them proudly.

Can you tell it’s been raining on the East Coast? Follow me on Twitter or Instagram for other subpar metaphors and thoughts. In the rest of this newsletter, we’ll talk about a fresh new venture fund that isn’t afraid to talk about privilege or honesty,

G on G

I spoke to Sophia Amoruso, the founder of Nasty Gal and Girlboss, about her new venture fund for founders, Trust Fund.

It is launching with a $5 million target, targeting a check size between $50,000 to $150,000. She’s already landed checks from the who’s who in tech. Prominent investors include a slew of a16z partners such as Marc Andreessen, Andrew Chen and Chris Dixon, as well as entrepreneur Ev Williams, icon Paris Hilton and support from investors Ryan Hoover and Cleo Capital’s Sarah Kunst.

Here’s why this is important: It’s her high-profile and rocky experience in Silicon Valley’s spotlight that has finally given Amoruso the operating experience needed to launch her own venture firm. While she is opening up a $5 million allocation to accredited investors outside her network, she said from a portfolio construction standpoint: she’s not necessarily looking for “diamonds in the rough” or a specific diversity quota.

“I plan to invest in men and women and everything in between. And if anything, like why not invest in the privilege and ride the coattails of a dude?” Amoruso said. “As a woman, why wouldn’t I want to invest in the advantage that a man has, like, feel free to publish that — it’s true.”

• Sequoia injects $195 million into an ever-eager seed environment
• Women-founded startups raised 1.9% of all VC funds in 2022, a drop from 2021

Image Credits: Emily Malan

Gas

Discord has acquired Gas, a compliments-based social media app for teens. Reports Amanda Silberling:

On Gas, users sign up with their school, add friends and answer polls about their classmates. But the questions in the polls are intended to boost users’ confidence rather than damage it. Teens might be asked to choose which of four friends is the best DJ or has the best smile. Then the person who was chosen will get an anonymous message with their compliment, sent from a vague “boy in 10th grade” or “girl in 11th grade.”

Here’s why it’s important: When Clubhouse first rose to fame, investors and founders alike were abuzz with energy around the opportunity for innovation in the consumer social space. Since, Clubhouse has been through its share of struggles — listen to my Equity episode with the CEO here — but so has Twitter. I think Gas’ early exit and the slew of similar apps already on site, may bring some needed optimism to the conversation.

• Losing the horn: VCs think majority of unicorns aren’t worth $1 billion anymore
• A peek into the future as Sam Altman sees it

Image Credits: Bryce Durbin/TechCrunch

The follow-up

I’ve covered Clearco, formerly known as Clearbanc, for years. Like many, the Toronto-based fintech had a particularly volatile past 12 months. But this week truly marked the end of an era, with co-founder Michele Romanow stepping down from her position as chief executive of the tech unicorn.

Here’s why it’s important: Clearco has undergone numerous rounds of layoffs over the pandemic, including a cut that impacted 25% of staff. Additionally, in 2022, the Toronto-based fintech saw its other co-founder, Andrew D’Souza, step down from his CEO role to be replaced by Romanow. Now, both the co-founders will assume executive chairman positions.

“We don’t ever lie, we are under the same pressures as every other company to become a profitable business. And so we’ve just continued to make the hard decisions … and continue to be ahead of the curve,” Romanow said in an interview with TechCrunch, explaining the shift.

• A lot of fintechs ‘have to fix their business models,’ say VCs who invest in fintech
• Netflix founder Reed Hastings steps down as co-CEO
• Shein valuation reportedly plummets by a third as it seeks $3B

Image Credits: Javier Zayas Photography (opens in a new window) / Getty Images

Etc., etc.

• Moritz Baier-Lentz joined Lightspeed Ventures as head of gaming, and Nihar Bobba joined Better Tomorrow Ventures as a new principal.
• Amazing advice for anyone who is a student or just … new.
• The latest from Helena Price Hambrecht, founder of Haus, in her new newsletter, Founder Things.
• Eduardo Saverin’s B Capital raised $2.1 Billion, reports Bloomberg.
• Funding for web3 startups plummeted 74% in Q4 2022, reports Crunchbase News.
• If you missed my most recent Startups Weekly, read it here: “The slow-burn standardization of venture capital.”
• TechCrunch is coming to Boston on April 20. I’ll be there with my favorite colleagues to interview top experts at a one-day founder summit. Book your pass ASAP!

Seen on TechCrunch

Musk stands to lose billions in trial over ‘funding secured’ tweet

Boston Dynamics’ latest Atlas video demos a robot that can run, jump and now grab and throw

Microsoft announces 10,000 job cuts, nearly 5% of its global workforce 

What’s next for the entrepreneur behind Layoffs.FYI

Seen on TechCrunch+

Pitch Deck Teardown: Scrintal’s $1M seed deck

Dear Sophie: What are some fast options for hiring someone on an expiring grace period?

Build a company, not a feature

7 space tech predictions for 2023

With that, I’m off to enjoy a weekend in Philadelphia with some new and old friends. Is anyone else tired of my East Coast tour? No? Just me? I’ll be back in San Francisco, and your inboxes, soon.

Take care,

N

Tech forgot its umbrella by Natasha Mascarenhas originally published on TechCrunch