We’ve written in recent months about the impact of the layoffs across the tech industry.
Last year (editor’s note: that means 2022 now), tech companies laid off more than 150,000 employees.
In October, that influx of talent to the employment pool served as a boon to the prospects of early-stage companies looking to add to their staff.
Despite the macroeconomic conditions shifting and the economy heading toward an expected recession, startups were largely moving forward as planned.
In fact, in a survey of more than 500 startup executives, over 40% said they increased their hiring in the first half of 2022.
So, in the face of these widespread layoffs, early-stage tech companies with capital at their disposal were uniquely positioned to benefit.
However, there is another subsect of entrepreneurs who benefited…
Those among the casualties from companies like Meta, Twitter, Microsoft with ventures of their own.
Take Nik Szerman, who was let go from Meta in November with four month’s severance.
“As counterintuitive as it may sound, this layoff left me in a really good position,” Szerman told Reuters. “Now I have time to focus on my own project.”
That project, Nulink, is a blockchain-based payment service that Szerman has reached out to such prominent players as Y Combinator and Andreessen Horowitz to support.
This movement garnered increased momentum as 2022 wound down.
For example, in November, San Francisco-based early-stage venture fund Day One Ventures started a program that aims to give $100,000 to 20 different startups founded by those laid off from tech companies.
By betting on this economic downturn to produce prominent tech companies – as Airbnb, Dropbox, and Stripe were in the last recession – these funds open the door to outsized future returns.
And similar to the Dotcom Bubble of the early 2000s, the wave of layoffs creates an impressive pool of new, talented entrepreneurs with valuable experience – and connections.
That’s an equation that can result in some game-changing success stories, so it’s important to stay plugged into the trajectory of these newcomers.