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A venture capitalist explains why this may be a great time to launch a start-up

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Edited by Alexandra Mondalek
Editor, New York

Start from scratch

In the news

•

Talent trading. As some of Silicon Valley’s most well-known tech companies have laid off tech talent as a resiliency measure, some start-ups are swooping in to offer engineers and project managers—many of whom they wouldn’t have been able to hire otherwise—a parachute. This is particularly true for late-stage companies with products on the market that already generate revenue rather than companies that are more reliant on venture funding, which has slowed. [Reuters]

•

Party foul. In venture funding, “party round” was first known as a pejorative phrase. It meant a start-up was raising small amounts of capital from many investors, none of which would be motivated by a big enough stake to step in and help if the start-up began to sputter. That definition changed to something bragworthy as the venture capital world—and valuations—exploded in the past decade. Now start-ups are faced with the gloomy reality that an economic slump (along with declines in capital) may be settling in. [NYT]

“The truth is that if you’re going to build something from scratch, this might be as good a time as you’ve had in a decade.”

Tailwinds despite headwinds. “There have been plenty of great companies started in the troughs to suggest that there’s no reason to stop investing,” says VC Bill Gurley. Even with all the macroeconomic factors contributing to a tense global climate, some favorable conditions—such as a newly far-reaching talent pool and access to cheaper real estate—mean that a start-up can still build a strong foundation today, according to Gurley.

•

Lessons from a downturn. One thing that makes this potential downturn different is that there have been “a lot of companies with huge amounts of revenue, some with massive losses,” explains Gurley. The “venture community needs to get its head around the new reality as fast as possible,” he says in conversation with McKinsey Quarterly editorial director Rick Tetzeli. Learn how one of Silicon Valley’s most respected VCs thinks about company course corrections, the path to public listings, and more.

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:29 - 28 Nov 2022

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What motivates employees to stay? A leader’s guide

A venture capitalist explains why this may be a great time to launch a start-up

Start from scratch

In the news

“The truth is that if you’re going to build something from scratch, this might be as good a time as you’ve had in a decade.”

On McKinsey.com

Archives

in

info@learn.odoo.com

[One week away!] Best of MAX for Business Webinar

What motivates employees to stay? A leader’s guide

A venture capitalist explains why this may be a great time to launch a start-up

﻿Start from scratch

In the news

“The truth is that if you’re going to build something from scratch, this might be as good a time as you’ve had in a decade.”﻿

On McKinsey.com

Start from scratch

“The truth is that if you’re going to build something from scratch, this might be as good a time as you’ve had in a decade.”