Welcome to Startups Weekly, a fresh human-first take on this week\u2019s startup news and trends. To get this in your inbox, <\/em>subscribe here.<\/em><\/p>\n Gumroad\u2019s Sahil Lavingia broke into the venture world as one of the early testers of the rolling fund, an AngelList product that allows investors to raise capital on a subscription-like basis. That was in 2020. Fast-forward to 2022 and a lot has changed.<\/p>\n One of those changes? The number of pitches from founders looking to raise. \u201cSince March, it\u2019s gone down about 90%,\u201d Lavingia told . \u201cI was probably seeing more than most \u2014 about 20 to 40 well-vetted decks a week \u2013 and that number is down to about two to four a week now.\u201d He\u2019s also seen the quality of talent rise for people wanting to work for Gumroad \u2014 which he partially attributes to the steady stampede of layoffs \u2014 and a decline of founders starting companies.<\/p>\n A downturn in the number of founders raising capital suggests that early-stage startups aren\u2019t as immune to macroeconomic shifts as some investors claim; in contrast, a boom of fresh startups would support the idea that recessions \u2014 and the accompanying spate of layoffs \u2014 are the time when startups are born.<\/p>\n Lavingia breaks down the state of founders into three buckets: \u201ctourist founders, immigrant founders and \u2018born and raised\u2019 founders.\u201d Tourist founders, he said, are the ones who only start companies in bull markets, a cohort he said has dropped by about 100%.<\/p>\n \u201cThey\u2019re rarely fundable in bear markets,\u201d Lavingia said. \u201cThey need to hire others to build stuff.\u201d Immigrant founders, meanwhile, care less about the reputation and status of starting a company but do weigh its risk and return. This founder cohort has been cut in half, per Lavingia. Finally, \u201cborn and raised\u201d founders are founders regardless of the market: \u201cThey all existed and therefore raised money in 2020-2021, so they too are not starting companies and raising money at the same rate.<\/p>\n There are two sides forming in early-stage venture capital: the investors who admit that talent has shifted and those who stand by deal flow that is as loud as ever.<\/p>\n If you want to read my full take, check out my + column, \u201cInvestors prepare for a founder downturn. Or influx. Wait, what?\u201d<\/p>\n In the rest of this newsletter, we\u2019ll get into Y Combinator on its shrinking class size and debut fund managers on their collective mood. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter<\/a>.<\/p>\n Y Combinator says it has intentionally shrunk the number of startups within its accelerator for the Summer 2022 batch. As first reported by The Information and independently verified by , Y Combinator\u2019s Summer 2022 cohort \u2014 currently in action \u2014 boasts nearly 250 companies, down 40% from the previous cohort, which landed at 414 companies.<\/p>\n Here\u2019s why it\u2019s important: <\/strong>Over the years, Y Combinator\u2019s ever-growing batch size has become a common \u2014 if not cliche \u2014 conversation among techies. I know this because we contribute to this conversation lots (especially on Equity). The biggest issue that folks have had with YC\u2019s growing class size is that it threatens one of the accelerator\u2019s biggest value propositions: network. The bigger the class, the harder it is to stand out.<\/p>\n While YC says it did not scale back due to critiques or the cost of its growing check size, the move will certainly help those within the current cohort stand out, simply due to lack of competition.\u00a0<\/p>\n Image Credits:<\/strong> Bryce Durbin<\/p>\n<\/div>\n +\u2019s Rebecca Szkutak<\/a> has spearheaded the latest investor survey, which gets a temperature check from seven first-time fund managers finding themselves in the beginning of a downturn. What advantages do first-time VCs have over more experienced competition in a challenging market? What steps are they taking to prepare for the fourth quarter? What is keeping them up at night given the market conditions today? These are all questions they answer and more in the piece now live on the site.<\/p>\n Here\u2019s what\u2019s important: <\/strong>There\u2019s always a silver lining, but especially if you have a smaller portfolio. Szkutak gives us a teaser excerpt below:<\/p>\n \u201cWe don\u2019t carry any of the baggage that may come with having previous funds or having a lot of capital tied up in what seems to be highly overpriced vintages,\u201d Stuto said. \u201cJust like a founder, who looks at the world differently than subject matter experts, we (first-time managers) bring a fresh outlook of how certain problems and industries are developing.\u201d<\/p>\n<\/blockquote>\n Read<\/span> Szkutak\u2019s survey<\/span>, and her <\/span>extra analysis of it<\/span>, on the site.\u00a0<\/span><\/p>\n Image Credits:<\/strong> Stephen Swintek (opens in a new window)<\/span> \/ Getty Images<\/p>\n<\/div>\n Read it here: \u201cThe bootstrapped are coming, the bootstrapped are coming.\u201d I also recorded a companion podcast with my favorite co-worker, Alex, which you can listen to here: \u201cIs it the bootstrapper\u2019s time to jump on the venture treadmill?\u201d<\/p>\nY Combinator cuts its class size<\/h2>\n
First-time fund managers have thoughts<\/h2>\n
\n
![\"A](\"https:\/\/www.ghanamma.com\/gp\/wp-content\/uploads\/2022\/08\/1659721884_210_GettyImages-180274525.jpg\")
<\/p>\nIf you missed last week\u2019s newsletter<\/h2>\n
![\"Image](\"https:\/\/www.ghanamma.com\/gp\/wp-content\/uploads\/2022\/08\/GettyImages-97970430.jpg\")
<\/p>\n