Layoffs swept through the tech industry all year long.

In 2021, startups were directed to grow at all costs. They overhired and had inefficient customer acquisition, but venture capitalists funded them. This year, we saw something a bit different. Rebecca Szkutak reports that VCs decided that using up cash in the name of growth may not have been the best plan. But did we see VCs follow through on their demands?

Startup consulting firms are raising venture funds on their own to have a stake in companies they’ve already partnered with. It’s a little more complicated than that, but Rebecca raises the question, “Why are so many consultant-led venture capital funds launching now?” It turns out startups were asking them to.

While we may have seen startup consultant firms handing out money, we didn’t see the same from traditional VCs, even though they have the money to do so. Beginning in 2020, there was a lot of talk about funding more historically unrepresented groups — but we haven’t seen VCs put their money where their mouths are. However, they are funding some people. As Rebecca puts it, “Because they aren’t backing no one — they’re just backing everyone but you.”

Dominic-Madori Davis looked into the amount of capital Black entrepreneurs raised in Q3 of 2022. To put things into perspective, Dom wrote, “Adam Neumann raised more in one round than all Black founders could in one quarter. Adele is worth $220 million. However, these numbers are not necessarily surprising. TechCrunch reported investors often retreat to their networks amid economic downturns, taking fewer risks on minorities.” Dom will be keeping tabs on this data in 2023.

How TechCrunch+ followed the venture dollars in 2022 by Miranda Halpern originally published on TechCrunch

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