📶 Initialized restructures

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Good morning 👋

South Florida is about to get hit with another hurricane which means I’ve been trapped inside and working.

In other news, we asked about whether or not SF is still the place to be as a builder in yesterday’s poll. The results may surprise you at the bottom of this email.

Let’s get into today’s piece.

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TL;DR:

• 👀 Top

• 🔗 Links

• 🚨 Startups

• ™️ Startups

• 📰 Headlines

• 💰 Funds

• 🗳 Poll

TOP STORY
1/3 of Initialize staff gets cut 🪚

Initialized Capital isn’t immune to layoffs, and the firm is slashing staff from 33 to 21, according to managing partner Brett Gibson's blog post.

The shake-up has resulted in notable departures, including longtime managing partner Jennifer Wolf, who had been with the firm since 2016, and Jenny Fleiss, co-founder of Rent the Runway, who joined as a partner just last year. The firm promoted three of its principals—Abdul Ly, Andrew Sather, and Zoe Perret—to partners.

The restructuring trend isn’t unique to Initialized, either. Recent cuts at firms like Greycroft and Sequoia show the broader venture landscape is in a similar mode of reducing staff and operating leaner.

Why it matters: This isn’t just another headline about layoffs; it's a signal that even established names in VC are having to make hard decisions.

The combination of:

1. Many firms becoming bloated during the VC boom cycle of 2017-2021

2. The new reality of a much harder fundraising environment

3. Adoption of AI agents and other software that automate many parts of operating a fund

Has all led to there becoming more pressure from each individual contributor to prove what they are bringing to the table.

What happens next: We don’t see this trend reversing course, and we expect more funds to follow suit.

If you want to keep your job in VC, you have to keep delivering. Bonus points if you can create operational efficiencies and automate parts of operating a fund that otherwise would need to be handled by a human.

Leverage is everything, and firms will continue to try to create more with less.

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LINKS

🤫 Inside the Secret School for the World’s Best Founders: Avra, run by former Y Combinator investors, keeps a low profile but is quickly becoming a critical partner for elite entrepreneurs

🧑‍🎨 The Design of Everyday Things: Poor design is never the user’s fault, but the designer’s

💪 Becoming a Conscious Leader: JM Nickels (Uber, Waymo, DoorDash) shares insights on leading without fear, finding your life’s objective function, and getting better at vision and strategy

🧑‍🏭 Inside How Stripe Crafts Quality Products: Katie Dill, Stripe head of design, shares 3 levels of quality that must be achieved

📢 How to Announce Your Fundraise: Michael Houck suggests how to time the announcement, how to drive attention, where to announce, what to include and mistakes to avoid

TWEET

STARTUPS (Together with Harmonic)
Hummingbird companies founded after 2023 🔎

We use Harmonic to get thousands of data points on companies like these. 

Here’s how you can do the same.

HEADLINES
What else we’re reading 📖

• OpenAI valuation surpasses every VC-backed IPO (Pitchbook)

• Asia Venture Funding Hits 10-Year Low In Q3 (Crunchbase)

• How venture capital could ‘fundamentally change’ over the next decade (Geekwire)

• US funding drives investment for European military tech start-ups (FT)

FUNDS

Explore all new funds (along with contact info) 👉 here.

POLL

Thanks for reading this far and giving us a little bit of your attention this week.

Feel free to unsubscribe whenever this stops becoming valuable to you.

- Clay

RESULTS

Here are the results from our poll question in yesterday’s piece:

Is SF / Silicon Valley still the mecca for building a company?

🟩🟩🟩🟩🟩🟩 Yes - absolutely ✅ (29)

🟨🟨🟨🟨⬜️⬜️ No - I'd rather build somewhere else ❌ (22)

51 Votes