Headcount growth is slowing as startups prepare for worst-case scenarios

Welcome to TechCrunch+ Friday

For the last 24 months, Thomvest Ventures recorded headcount data for 150 Series A to C enterprise SaaS startups, and we have the numbers.

This report prepared by Eddie Ackerman, Thomvest’s strategic finance operating partner, looks at startup hiring velocity since February 2021 by region, company type, and notably, how much time passed since last fundraise.

Ackerman says he expects to see another tranche of layoffs in several weeks after startups hold their Q4 2022 board meetings.

That’s not something any worker wants to read a few days before Christmas, but forewarned is forearmed.

“For companies with a strong balance sheet, strong backers, product-market fit or low burn, now is the best time to make critical hires,” says Ackerman.

And if that doesn’t describe your company, you should already be planning to reduce headcount.

“The tough decision to freeze hiring should be made early, even if your balance sheet is in a good position,” writes Ackerman.

If you’re a founder who’s reading this: when layoffs are in the cards, you have a moral and ethical responsibility to let your employees know as soon as possible. Do the right thing.

TechCrunch+ will publish on a light schedule next week, and we’ll resume our usual cadence on Monday, January 2. I’m taking a short break for the holidays and will send the next TechCrunch+ newsletter/roundup on Tuesday, January 3.

Thanks very much for reading us in 2022. Have a very happy new year!

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

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How to make the most of your investor relationships in 2023

As Santa Claus refactors his list of who’s been naughty and nice, it’s also a good time for startup founders to take stock of their investor relationships.

Vidya Raman, a partner at Sorenson Ventures, has written a TC+ article with do’s and don’ts for upcoming board meetings, her thoughts about which communication channels are best for different help requests, and specific data points you should raise in your discussions.

“Be ruthless about how you spend your time,” she advises, “especially with your investors.”

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Holiday shipping is easier this year, but the tech is still lagging

Global supply lines are in better shape than this time last year, but that doesn’t bode well for the future, writes Flexport CEO Ryan Petersen.

“This year’s improvements in shipping largely reflect a pullback in consumption rather than any improvement in the underlying infrastructure,” he says, noting that labor shortages, global instability and high fuel prices have created persistent bottlenecks.

“Fortunately, the data available today is rich beyond measure, and we also have the tools to leverage it in ways that can boost efficiency.”

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Pitch Deck Teardown: Card Blanch's $460K deck for its angel round

Fintech startup Card Blanch recently closed a $460,000 round for its pre-launch service that promises to let customers track personal spending from a centralized app.

To see why this deck was smiled upon by angel investors bearing good tidings, we’re sharing the founders’ non-redacted deck:

• Cover slide
• Problem slide
• Market size slide
• Solution slide
• Product slide
• “How it works” slide
• Competition slide
• Revenue model slide
• Market opportunity slide
• “Next steps” — the ask slide
• “Your whole wallet in one card” — value prop slide
• “Complete spending analytic in one place”— summary slide

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Dear Sophie: What are the pros and cons of the E-2 and L-1A visas?

Dear Sophie,

We co-founded a startup in Colombia, and we’re thinking about opening a sales office in the U.S.! I would be moving, and my co-founder will continue to run our engineering team from Colombia.

I’m currently considering both the E-2 investor and L-1A executive visas. What are the pros and cons of each?

— Courageous Colombian

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How to solve the financial close dilemma: 3 strategies that never fail

Be honest: Did you rush your November month-end close due to the December holidays?

New year’s resolutions are hard to stick to, but because this is the slowest time of year, it’s a good time to establish healthier accounting habits.

Before running your December numbers, look for ways to automate the month-end close, advises Shagun Malhotra, a CPA and CIA who’s also an experienced auditor.

In a TC+ post, she shares three strategies for digitizing this process, along with suggestions for sub-metrics to track that will give you an accurate snapshot of your financial health.

“The data gathered in these steps will allow you to identify your business’ root issues quickly, which will then let you assess what to do next.”

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3 Black investors talk about what they’re looking for in 2023

Investors are generally optimistic about tech’s long-term ability to recover, but when it comes to expanding opportunities for Black founders, Dominic-Madori Davis says they’re largely fatalistic.

She interviewed three Black investors to get their thoughts on impact investing, which trends they expect to take off in 2023, and how they prefer to be approached by founders:

• Alexis Alston, principal, Lightship Capital
• Richard Kerby, general partner, Equal Ventures
• Jadyn Bryden, vice president, Xfund

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Avoid 3 common sales mistakes startups make during a downturn

Analysts estimate that IT spending will increase in 2023, but tell that to SaaS sales teams who are trying to close contracts with customers who’ve been instructed to slash spending.

“What every company needs now is efficient sales,” says Anand Shah, CEO and co-founder of Databook, who explains why reactive moves like increasing sales quotas or raising prices won’t move the needle.

“Make real changes to meet your buyers’ needs. Use the macroeconomic backdrop to make the necessary sales productivity improvements.”

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