Tomorrow Investor

Recent Studies Reveals a Need to Right-size Organizations, Partnerships 


A recent report from Thomvest Ventures took a good look at startup hiring velocity across regions, and company types, and even based on the amount of time that has passed between fundraising endeavors over a two-year period – and the results aren’t quite the good news many have looked forward to.

According to Thomvest strategic finance operating partner Eddie Ackerman, it’s highly possible that there will be another series of layoffs over the next several weeks, possibly after the Q4-2022 board meetings of several startups.

To Freeze or Start Hiring?

For those whose balance sheets aren’t in the healthiest state, it may be time to consider right-sizing their organizations. Likewise, the decision to stop hiring should be made as early as possible. Ackerman says that this needs to be regardless of any hopes that a company’s financial state could improve over the next few months.

While this sounds dire, Ackerman says it should also be construed as a wakeup call for companies with strong or at least stable balance sheets that it’s a great time to consider and bring in people for critical positions.

Decisions, Decisions

This poses several dilemmas for employers, especially startup founders. When is the best time to advise one’s team about the need to downsize? How does one know if the company ledger is healthy enough to retain people? 

On the other hand, given current circumstances, which critical positions ought to be filled in first? 

The answers are, unfortunately, dependent on conditions within individual organizations.

Rethinking Partnerships

Along with the need to downsize, organizations also need to consider their relationships with partners and especially with investors.

Sorenson Ventures partner Vidya Raman, for one, opines that a certain amount of ruthlessness is necessary, especially when it comes to the time spent with investors.

Raman also advises startup leaders to put some thought into the channels they use to communicate with investors and partners, particularly those used to convey requests for assistance. 

Likewise, startup leaders need to be specific with regard to data points and other critical items raised in their discussions both to save time and ensure that they are properly getting their points across.

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