Hi, this is Wayne again with a topic “Startups are hiring fewer workers and paying out less in equity comp | Equity Podcast”.
This episode is presented by invest Puerto Rico, if you believe your business can go anywhere. Puerto Rico is the place hello and welcome back to equity, The Tech runch podcast, where we unpack the numbers and the Nuance behind the headlines. This is Alex, and today is March 13th, 20, 2024 and Welcome to our Wednesday show. This is when we dig into critical, startup and Venture Capital stories from the week thus far, and we have an absolutely packed show for you today on the show notes on Startup comp for workers and how those numbers are changing, then how one startup is profiting off Of death, but in a way that’s actually great, I promise it will make sense. Hear me out then bear Robotics and its killer new round for cute robots, new stuff from Blue Sky and brave, and then we’ll wrap with some Venture Capital news that actually took us by surprise.
Let’S go starting somewhere a little bit different today. Let’S talk about startup employees before we get into all the startup news proper. Now I have a bunch of data from carda. That tells us quite a lot about the state of compensation for startup employees roll with me here there are going to be a couple of numbers, but I promise this is going to be easy to understand. So, first of all, companies that use Carta and that’s a pretty big subset of the overall startup population hired about 523,000 people in 2022 and notably that was pretty much the same number as were hired in 2021 when it was 525,000. However, last year 2023 that fell to about 268,000, a reduction of call it half in a single year’s time. So the era of efficiency really did do a number on Startup hiring and when we see demand fall but Supply stay static. Well, we expect prices to come down, so did the value of Labor diminish? The answer is yes, and one way that you can see, that is how Equity packages for startup employees have contracted.
The key data point here is that between November of 2022 and September of 2023 Equity comp declined by about 37 % according to Carta. Now, since then, numbers have largely stabilized. The change from September of 2023 to January of 24 was actually an increase of 2 %.
In average Equity issued to new highers, but still it’s down more than a third, and that does appear to be pretty sticky. So it’s more of a buyer market for Tech labor at the moment, which we kind of knew. But it’s good to get the data on how that’s impacting the average person out there. Now one last data point 32 % or just about a third of 2022 era. Hires on ca’s data have already been out of that job.
That’S kind of what I expected 2022 is a long time ago, and a lot has changed since then, but here’s the number that really threw me – 23 % of 2023 hires on ctis platform – are also already out of those jobs. So quits firings layoffs, not clear, but it does really go to show that the layoff era didn’t just Impact Staff that have been around for a long time. Recent hires also got caught in the churn, but let’s talk about something: uplifting: death taxes and dealing with paperwork or what I consider the three immutable Facts of Life, I’m kind of kidding. But there is a startup out there today.
That does want to help people with the deaths of loved ones and taking care of all of their Affairs. Just given the topic, I was a little skeptical of the startup called empathy which just put together a 47 million doll round, but frankly, as ingred London writes for Tech, runch death’s inevitability doesn’t make it any less awful. It just doesn’t not the least of which, because while loved ones are grieving, they also have to handle a dizzy number of practical tasks. I’M thinking, organizing funerals and settling finances. It’S a lot of stuff to do now. Empathy has a way to help and it was initially a b Toc company, but it has since pivoted to more of a B2B Toc model, essentially offering its services via policies from employers and insurers, and that’s now more than 99 % of its business today.
So think of it more as a perk, if you will versus something that you go out and buy itself. So what does empathy offer people who have lost a loved one? Well, the company’s platform incorporates a mixture of AI and human guides to help people with all the different aspects of the bereavement process and it’s a pretty long list. It’S pretty wide talking about counseling services, AI, to help write obituaries, shutting down all the cloud accounts from the deceased dealing with complex financial affairs. It’S a lot of stuff and some help probably isn’t not welcome. I think, especially for folks who are dealing with death and are alone or just don’t have a lot of family support. What empathy offers could be, in fact, kind of lovely if you’ve dealt with death, you know how complicated it is.
So here’s a company that wants to make that just a little bit less onerous. Let’S change tone here a little bit and talk about cute robots. Now LG is no longer a household name in smartphones, but it still is investing quite a lot in gadgets that humans will interact with, and in that vein, the company confirmed a $ 60 million investment into bare robotics, a California based startup.
That makes artificial intelligence powered server robots. What does that mean? Think of them, as kind of autonomous tra Towers, on wheels that are meant to replace waiters in restaurants and other similar venues with this large check, LG is now Bear’s largest shareholder. Now, why is it called? Bear if the company isn’t making robotic Bears. My guess is that if you look at the California state flag, you’ll see what the mascot is of the state where bear is based, and then it kind of makes sense. Now, if you go back in time when bear last raised in 2022, it was valued at just over $ 490 million post money, so I presume that’s gone up at least 60 million in this round.
If it was flat, or maybe more if it was an up round today, the soft bank backed startup, operates its indoor delivery robots in the US, South Korea and Japan today, and these serving robots, which are designed, of course, to help deliver food to restaurant customers have Also been deployed in other settings, successfully kind of cool. I have seen similar robots before and I have to say, as you can tell from my tone, I pretty much love them. I don’t know if the botler robotic Butler is still around, but I got to play with with it back in 2014 and it ruled here’s to more cute robots and here’s to more robots taking over the tasks that humans didn’t want to do. Anyways.
What’S next in Tech, that’s not the right question! It’S where Puerto Rico! More than just a Tropical Paradise, it’s an Innovations, Paradise where startups and Global players coexist in a vast and vibrant ecosystem, where Talent runs deep, highly skilled and bilingual plus the island offers the most competitive tax in incentives in the US. If you believe your business can go anywhere, Puerto Rico is the place find out more at invest. Pr.Org TechCrunch put down the hardware pick up some software. Let’S talk about blue sky, Twitter alt, blue sky is sticking with having the best brand names in the game, with its latest move to open source ozone, it’s tool that allows individuals and teams collaboratively to review and label content on the Network.
So what does that mean? What teams, what individuals well recall that blue sky is a distributed or decentralized social network, so you can kind of Choose Your Own Adventure over there, similar to how Maston works. If I am grocking it correctly now, Blue Sky says this change will give users quote unprecedented control over their social media. Experience. Techch writes that the company’s vision for moderation is a kind of stockable ecosystem of services, which is why going to start allowing users to install filters from independent moderation, services on top of what Blue Sky itself already requires, and so, as a result, users will be able To create a customized experience tailored to their own preferences, I think this is pretty cool frankly and honestly, probably the best way for free speech to remain as free as possible online without allowing trolls to run the place.
What do I mean by that? Well, Blue Sky. Can set a very low bar for moderation and then allow individual users to raise that bar if they want you can have as much or as little control as you’d like, unlike centralized platforms, it really does feel like the user is in the hot seat here and That’S great because it moves the onus of responsibility a little bit off of Blue Sky to make every single call about content and instead says hey. What do you want build that sticking to the theme of smaller upstart companies taking on the Giants? Let’S talk about Brave. It’S a browser company that is competing for market share against variously apple and alphabet and Microsoft.
That’S not an easy task, however. The company just got a boost thanks to changes that Apple made to its IOS operating system in response to the European digital markets, act or dma. Now bleeping computer reports that a new screen – that’s part of this new version of iOS that asks users to choose their default.
Browser from a list of options has sent daily installs of the Brave browser from 72 to 8,000, a day to more than 11,000 per day. Very, very quickly for a startup that is a big set of gains and if it proves sticky for brave, could really grow its market share hey. It turns out that defaults matter who would have thought to close out a little venture capital news, and that is that Social Capital has booted some key stack now.
Social capital is the venture capital, A firm led by chiman popedia, and it has fired two partners and over on X, The Firm wrote that it has quote terminated the employment of two of its employees due to employee specific circumstances and that it had quote. No further comments at this time now that’s a bold comms strategy, but hey at least the firm was upfront about its actions now Bloomberg reports that Capital has hired an external Law Firm to dig into the matter whatever it is. So that sounds reasonably serious. Now Bloomberg. Also reports that it appears that grock is at the center of this issue. Grock is a hardware and Cloud company for AI models, using what it calls an lpu inference Engine with lpu standing for language processing unit. But wait you say: grock! Isn’T that that thing that Elon Musk made for Twitter well kind of but we’re talking about grock with a Q, whereas Elon musk’s company is called grock with a K, so they’re different, although they are pronounced the same, we will learn more about this in time, but Big changes over at Social Capital all right, that’s all the time we have, but before you go, please join me in Wishing Maryanne our longtime co-host, our dear friend and one of my favorite humans alive a happy birthday tomorrow. We don’t have a show coming out on Thursday, so I’m saying it today. She is off the this week, but we wish her the best, because she is tremendous now if you need more from Equity between now and when we are back on Friday morning, we are Equity pod over on xent threads and Tech, runch pods on Tik Tok, at Least until that gets banned, I’m Alex this is eity.
We’Ll talk to you soon. Bye Equity is hosted by myself, Alex Wilhelm and techren Senior reporter Mary and aeto. We are produced by Teresa loans, solo with editing by Kell Bryce. Durban is our illustrator and a big. Thank you to the audience development team and Henry pette who manages Tech, runch audio products.
Thank you so much for listening and we’ll talk to you next time. .