Nick Sherman lost his job two months after he was hired by Meta due to a 13% reduction in staff. A few days later, he returned to the labor market in search of funding to support his Nulink blockchain company. So, he sent a presentation of the company to startup accelerators such as Y Combinator, as well as to Andreessen Horowitz, an investment fund specializing in investments in the cryptocurrency industry.

“As absurd as it sounds, this layoff left me in a very good position,” says the 24-year-old. Sherman is part of a new wave of start-up entrepreneurs that emerged after the massive layoffs that occurred in Silicon Valley in the second half of 2022, according to representatives of the venture capital market. US giants such as Meta, Microsoft, Twitter and Snap have laid off more than 150,000 employees, according to platform Layoff.fyi. Of course, as total investments made by VCs in 2022 fell 33% globally to $483 billion, early-stage funding has remained solid, with funding rounds (seed) and angel investors to hit $37.4 billion dollars and corresponds to the level of 2021.

Founders, tech workers who lost their jobs after mass layoffs in Silicon Valley.

Day One Ventures, an investment fund that invests in start-up companies, launched a new startup funding initiative last November with tech founders who lost their jobs. Its slogan is “fund, not fire.” The program aims to give out 20 checks worth $100,000. In fact, the fund claims to have already received more than 1,000 applications, most of which come from former employees of Meta, Stripe and Twitter. “We are investing $2 million in 20 companies.

If we find at least one company that can become a unicorn, then it can return the entire capital of the fund,” says Masha Busher, co-founder of Day One Ventures. “Looking back, companies like Stripe, Airbnb, Dropbox were created during the crisis.” At the same time, last November, Index Ventures, which has funded companies such as Facebook, Etsy and Skype, launched the Origins fund, which intends to invest $300 million in early-stage startups. Silicon Valley investment funds such as US Venture Partners and Austrian Speedinvest have received similar amounts to invest in startups.

Most investors claim that the field of games and artificial intelligence is at the center of their interests. “In any period of economic uncertainty, there is an opportunity to recover, reprioritize and refocus our energies,” says Index Ventures partner. Sherman says his project was rejected by Y Combinator and has yet to hear from Andreessen Horowitz. However, he added that there are other investment funds that have shown interest. “I told the investors to talk in two or three months,” he said. “Now I will focus on upgrading our technology.”