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FOMO, Diversity, and Resilience: The 2023 VC Trends Moving the Needle on Hiring

The Betts Team
June 2, 2023

Yesterday’s FOMO, real deal diversity, and resilience are shaping venture capital and startup investment. And the news is both good and bad when it comes to hiring.

The Vaseline has been wiped from the VC lens. With high inflation, rising interest rates, and a global economic turndown, VC activity in 2022 saw sharp declines after many years of upward trending trajectory—and the outlook for the rest of 2023 seems to be more of the same, with a continued shift in investment priorities and economic mindsets. As spring gives way to summer, the VC funding winter stretches on, fueled by banking sector turmoil, stubborn inflation, the ongoing conflict in Ukraine, and general macroeconomic teeter-tottering, all of which have sustained a ‘chill’ in investment activity.  But this is a story of headwinds and tailwinds.

‘Chill,’ however, does not mean freeze—in fact, some of the VC trends shaping up for 2023 spell opportunity for many previously shut out. Real-deal diversity and a move to new markets for startup investors mean job expansion into new areas—a portent of good and great things to come.

Global venture investments in the Q1 of 2023 surged 10% from the previous quarter to $95 billion due to two BIG-ticket deals. Open AI had a record fundraising round of around $10 billion, along with Stripe, for about $6.5 billion. However, US VC funding declined about 7% without these two outlier investments, with global VC funding dropping 9%, according to Bain. Seed-stage deals, however, ticked up around 7%, and late-stage deal sizes grew 15%, even when excluding the funding round raised by Stripe.

In terms of hiring, we are looking at more jobs at Seed stage and late-stage companies while those in the middle flatten or dip south.

Here are some trends that have shaped the first half of 2023 and will continue to impact the second.

Bruised by yesterday’s FOMO.

2022 saw the bubble pop on many faddish startups—from fintech to crypto, DeFi, and more—who had attracted millions (sometimes billions) in capital, despite not having sustainable business models and some dicey governance. But 2023 is the year the VCs will start to pay for all their FOMO of yesteryear in their balance sheet. Billions have already been written off for dazzling fiascos like Celsius, FTX, and Terra Luna. While more startups hawking dubious tech solutions will likely emerge out of the woodwork, particularly in the crypto and blockchain space, VCs will be trying to course-correct and overcompensate for the FOMO sting by scrutinizing portfolio companies more intently and even getting involved operationally.

For those looking to get hired in these downturn industries, good luck—fintech, DeFi, and the like are in a moment of correction and will be retrenching to see if they can find a different way forward. BUT the hiring is heating up in some sectors like AI, travel tech, and HR tech. You can get the inside scoop on these hot-to-hire industries in the Betts 2023 Hot Guide.

Real deal diversity.

Finally, diversity may be more than just lip service, which means that more women and POC will get their startups funded. Many VCs have acknowledged (privately) that most of their deals come from startups run by founders from within their network, confirming a Harvard study that came to the same conclusion. For once, being part of the old boys club may no longer put you first in line for funding. 2023 may just be the year to be a female founder, hail from a minority race or ethnicity, or for those interested in starting businesses in Africa, putting you ahead of the pack to pitch and get funded.

Like big companies, VCs are increasingly sharing their portfolio’s diversity figures—and proudly. And since startups with founders that make the diversity cut are still (very much) in the minority means the odds are working ever in their favor. 2023 and onward will make this increasingly apparent as fund and angel networks that solely focus on female or minority-led startups proliferate.

If you fit the diversity bill, things may be looking rosier for you in terms of joining this burgeoning group of startups. There’s a long way to go until things are more fairly calibrated, and the more folks that can fill the ranks, the better.

Deal sourcing is moving to new markets.

New startup hubs have been sprouting up throughout the US and abroad since 2020, in newer “secondary markets” that have lower costs, as well as in markets where fund managers may have relocated during the last few years (here’s looking at you, Florida, Texas—in particular Austin, Colorado, and Utah). Some investors may be refocusing their energies to invest in their corner of the woods instead of more traditional markets so they can diversify and perhaps have more personal engagement, dropping by now and again to check in on how things are going.

If you live in one of these burgeoning startup hotspots, you may be in luck, as more businesses in your area mean more opportunities. And with lower living costs in these newer markets, your comp may go the extra mile.

VC bubble has popped—resilience reigns supreme.

Even as the investing environment evolves, sometimes dramatically, opportunity lurks in the land of the new normal. With a slowdown in investment pace and more reasonable valuations, opportunities will emerge. Those prepared to ride the wave of economic change may be well-positioned to reap the benefits of this shifting investing landscape—resilience may be the word of 2023 for VCs and startup employees alike.



2023 is full of headwinds and tailwinds. Increased interest rates, stubborn inflation, bank volatility, and more will continue to strain the financial system this year. But a growing awareness of diversity and looking to new markets are opening doors that were once shut tight. Understanding how to face these shifting winds will help guide you through this evolving startup employment landscape and navigate the best equity options deals so that you are well-positioned for the sunnier days to come. If you are looking to hire top talent, Betts’ has got you covered. Connect with us to chart out the smartest way to staff your startup up.