Throughout the year we’ve been reaching out to you — our readers — to get your take on some of the most important issues of the day. You’ve been radically honest, funny, opened our eyes to key problems in startup Europe and offered some brilliant advice to others.
Over the past 12 months, you shared your thoughts on everything from fundraising horror stories to working with bad startup managers and concerns about the effect of the downturn on mental health in the workplace.
It’s been a bumpy year — here’s what you had to say.
Money was the main cause of hiring woes
At the beginning of 2022, 92% of readers we surveyed told Sifted that hiring had become more difficult over the previous 12 months. Two thirds said that the number one cause of competition was the amount of money that many startups had at their disposal — after 2021 saw record investment that continued to rise throughout Q1 of 2022.
It meant that startups that didn’t want to take on bags of VC cash were up against it when it came to securing top talent. “Even some seed companies are offering FAANG (Facebook, Amazon, Apple, Netflix, Google) level packages now,” one respondent told Sifted. “It’s so difficult to match that if you don’t want to take on huge amounts of VC money — money that comes with strings [attached] and an expectation of a blitzscaling approach.”
But 10 months on from the survey the situation could be changing. 150k+ tech workers have been laid off globally, as companies have scrambled to shorten the path to profitability and extend their runway. Some in the tech industry think it spells opportunity for startups to pick up talent on the cheap.
Readers also thought that candidates’ priorities were shifting, and 74% said that they placed more emphasis on company mission than they did the year before. While two thirds thought that a flexible working environment, positive mission and good salary were the main priorities for jobseekers, just 23% thought equity and shares were high on the agenda.
Arrogant VCs and ghosting the norm for fundraising founders
Three quarters of the people who shared their experience of fundraising said that they’d had to deal with arrogant VCs and been ghosted. One founder said a VC had pretended to fall asleep while they were pitching, and another told us that ghosting was so common because investors didn’t respect founders’ time. A third of respondents also said they faced discrimination while raising, and a number described VC as a predominantly white “old boys club”.
European VC is notoriously unrepresentative, and 68% of people advocated for more investors from underrepresented backgrounds as a solution to the woes facing fundraising founders.
The lack of investors from underrepresented communities creates a “negative feedback loop”, where founders raise less money at lower valuations, said one respondent. This hampers their success and makes them appear less backable, they added.
Most startup bosses are bad managers
83% of the 138 Sifted readers who responded to our survey on startup managers told us a minority or none of their bosses were equipped to manage.
Micromanaging was one of the main issues, and one worker said that during lockdown they were required to join a Zoom call for the entire day to prove that they were working. Many said it was particularly common among solo founders, who struggled to adapt as a company scaled.
“I have experienced the horrors of ‘founder syndrome’ a couple of times,” one startup worker told us. “After a while, they start to feel they don’t have a tight enough grip on the day-to-day running of the startup, and small things will be regarded as existentially insurmountable. It’s exhausting.”
Worse was the fact that nearly half of respondents said they’d experienced bullying, harrassment or discrimination from their manager. While open sexism and racism were mentioned by some, one woman of colour told Sifted that the discrimination she faced “bubbled under the surface”.
“Many senior roles at startups still feel like they are reserved for an elite few,” she added. “This is my personal experience, as well as that of other women and people of colour I know in similar companies.”
Startups put the brakes on hiring as the downturn takes hold
As the downturn began to wash over the tech scene towards the end of spring, we asked readers how their startup was responding to the economic uncertainty. Three quarters of respondents said their company was taking steps to increase its runway and two thirds said they’d reduced or completely frozen hiring.
83% of people also said that they thought it was only going to get more difficult to raise money in the near future — an expectation that seems to have been proven right as investors became more cautious with their funds in the second half of the year. “We haven’t changed our pitch, but we have lowered our expectations of funding amount and valuation,” said one founder.
But while readers were concerned about the situation, most weren’t panicking, and some founders and startup operators told Sifted that the market was just levelling out after a period of unsustainable startup growth and VC investment. “The economy isn’t bad, it’s going back to normal. The last few years have spoiled founders,” said one respondent.
Most startup employees’ mental health has suffered because of work
87% of respondents to our survey about mental health in the workplace said that theirs had been negatively impacted at some point because of their job. The most common reason was burnout, as the pressures of working in a fast-paced environment without proper support took its toll.
“Targets often overreach what is genuinely feasible, and the expectation of doing more with less is part of the startup mythology,” said a startup worker. The problem was also common among founders, too.
“I was completely burnt out, but I didn’t want to admit it to my cofounder or investors. Eventually I was at a stage where leaving the company was the only solution. It took me at least a year to recover,” said one.
But there were some positives. 58% of Sifted readers also said that they felt comfortable speaking to their manager about their mental health — and this helped when times were tough. “My manager is open about his experiences of anxiety and sleep issues, and if I’m struggling with either we talk about it in 1:1s. It helps to know he understands.”
Are startup accelerators worth it?
As the number of startup accelerators has sky-rocketed in recent years, Sifted wanted to find out why founders actually took part in a cohort — and if they were even worth doing. Two thirds of readers told us that they joined to increase their chances of raising money, and 49% said they wanted to grow their network.
But nearly half wanted accelerators to offer more introductions to investors — and the same amount wanted more relevant mentoring. “It was like going back to school, only to find you know more than the teachers,” said one respondent — whose mentors were mostly corporates who had little or no experience in the startup world.
So are accelerators worth taking part in? Sifted readers thought so. While 28% said that an accelerator they took part in wasn’t all that useful, 86% told us that they would recommend the right accelerator to other founders.
