Equity Inside startup shutdowns with the creator of Layoffs.FYI (re-run)
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Sep 4, 2024 Roger Lee is an angel investor and the creator of Layoffs.FYI, known for his work around startup dynamics. In this conversation, he reveals alarming statistics on startup failures, noting a significant increase in shutdowns from 2022 to 2023. He discusses innovative funding strategies, highlighting a shift towards angel investment. Lee also examines how recent economic trends have impacted layoffs in the tech sector and explores the role AI might play in the evolving job market.
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Startup Closures Surge
- Startup closures increased by 70% from 2022 to 2023, as tracked by Layoffs.fyi.
- PitchBook estimates 3,200 venture-backed startup shutdowns in 2023, likely an underestimation.
Dissolutions in Acquisitions
- Company dissolutions occur not just in shutdowns, but also in most acquisitions due to asset purchase sales.
- This highlights the continuous nature of wind-down processes, regardless of company success.
Sunset's Funding Strategy
- Sunset, a startup wind-down service, raised angel money instead of VC funding to avoid venture-scale growth pressures.
- They also implemented a unique referral program, granting investors more equity for referring clients.